U.S. market fluctuated Friday as tech stocks stopped rally

U.S. stocks futures were mixed on Friday after Thursday’s deepest equity selloff since June. Investors were waiting for the August jobs report.

Futures on the S&P 500 Index changed insignificantly thus far, while Nasdaq 100 Index futures tumbled down by 1.1%. The Stoxx Europe 600 Index was also little changed. However, the MSCI Asia Pacific Index plunged by 1.2%.

In pre-market trading, Microsoft Corp., Amazon.com Inc., and Facebook Inc. shares were slightly lower. It seems some of the momentum from the tech rout had already dissipated. Still, the S&P 500 contracts surged forward by 0.7% before erasing the increase. On the other hand, Nasdaq 100 Index futures remained in the red.

The tech-driven plunge in U.S. markets on Thursday hasn’t influenced the other markets. European bank stocks fluctuated. Before that, the banks gained due to news that Spain’s CaixaBank SA and Bankia SA are considering a 14 billion-euro merger.

Analysts expect the jobs report to show that the labor market continued to rebound in August. Meanwhile, economists project that the unemployment rate plunged below 10% for the first time since March. Even if the pandemic continues, those could add support to a case that the economy is improving.

How are the tech companies faring now?

Investors are focused on tech companies for now. The industry is generating blockbuster profits thus far, but there’s also been an explosion of speculative options among retail investors. For some analysts, that’s good evidence that tech stocks have become overheated.

JPMorgan Asset Management strategist Kerry Craig stated that while valuations are elevated, analysts are also mindful of the earnings and revenue potential in the coming years from areas like cloud computing and artificial intelligence. According to him, the present situation is unlikely to be a repeat of the tech wreck of the late 1990s, considering how much the market and sector have changed.

Meanwhile, emerging-market stocks plummeted down for the third day. Asian shares also tumbled, with Australia’s benchmark recording the biggest plunge since May.