Stock Market Futures Dip Amid Cryptocurrency Downturn and Tech Company Concerns
The start of the trading week saw a slight dip in the futures of a major stock market index, influenced by a drop in cryptocurrency values and concerns surrounding a major tech company. The futures tied to this comprehensive market index decreased by 0.3%, and the futures of a large tech-heavy index fell by 0.5%. On the other hand, the industrial average index futures saw a minor gain of 19 points, registering an increase of 0.04%.
Crypto and Precious Metals Take a Hit
Significant changes were observed in the cryptocurrency market, with bitcoin falling below the $80,000 mark for the first time since April. This drop signifies that investors are adopting a more risk-averse approach after witnessing sharp declines in the values of gold and silver the previous Friday. Silver, which had seen its value more than double in the past year, experienced a steep drop of around 30% on Friday — its worst single-day performance since 1980. Gold also saw a decline, falling around 9%.
Despite these drastic drops, the cryptocurrency and two precious metals managed to rebound from their respective lows on Monday. This rebound helped to offset some of the losses in equity futures and to alleviate some of the risk-averse sentiment among investors. Bitcoin managed a recovery, trading above $78,000, while gold and silver still saw decreases of over 3% each.
Tech Company Plans Stalled, Influencing Stock Market
Concerns over a major artificial intelligence-related tech company also influenced the dip in the stock market. Reports suggest that this company's plans to invest $100 billion into OpenAI have come to a halt, with top executives expressing doubts about the deal. The company's shares fell more than 1% in premarket trading.
Over 100 companies listed on the major index are expected to report this week, including major tech giants. The overall reporting season has been successful so far, but some high-profile stocks have experienced sell-offs post-earnings. However, strategists at a German multinational investment bank and financial services company noted over the weekend that earnings growth is on track to be the strongest in four years.
On Monday, a famous entertainment company reported earnings that exceeded analyst expectations.
January Jobs Report Anticipation and Political Developments
The market is also anticipating the release of the January U.S. jobs report, scheduled for Friday morning. Based on a poll of economists, it is expected that 55,000 jobs were added last month.
The stock market is also reacting to recent political events. The major benchmarks experienced a drop after the announcement of a nominee for Federal Reserve chairman by the former President. If approved, the nominee would replace Jerome Powell later this year.