Market Snapshot: Nasdaq futures down sharply after last week’s tech rout, Dow slips too

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Investors looked set to pick up where they left off ahead of a three-day weekend, with a sharp fall in Nasdaq-100 futures pointing to sharp losses for U.S. technology stocks.

Remarks by President Donald Trump on Monday, threatening to “decouple” the U.S. economy from China added to market jitters.

What are major indexes doing?

Futures on the Dow Jones Industrial Average YM00, -0.60% were off 64 points, or 0.2%, at 28,010, while S&P 500 futures ES00, -1.18% fell 29.10 points, or 0.9%, to 3,388.50. Nasdaq-100 futures NQ00, -2.83% dropped 270.75 points, or 2.3%, to 11,278. U.S. markets were closed Monday for Labor Day.

The tech-heavy Nasdaq Composite COMP, -1.26% dropped 3.3% last week to end Friday at 11,313.13, its biggest weekly decline since March. The Dow Jones Industrial Average DJIA, -0.56% lost 1.8% last week, ending at 28,133.31, while the S&P 500 SPX, -0.81% dropped 2.3% to 3,426.96 — the biggest weekly falls for those indexes since June.

What’s driving the market?

The major U.S. stock indexes sunk last week, with the Nasdaq bearing the brunt, as previously highflying technology shares suffered a heavy bout of selling.

Read:Here’s why the Dow plunged last week and what’s ahead for stocks

The reversal for the Nasdaq, which had previously soared to a series of all-time highs, was led by falls for its highest-flying components, including Apple Inc. AAPL, +0.06%, Facebook Inc. FB, -2.88%, Microsoft Corp. MSFT, -1.40% and Inc. AMZN, -2.17% and Google parent Alphabet Inc. GOOG, -3.09% GOOGL, -2.96% as worries grew that the momentum-led gains for the sector had finally pushed valuations too far to be sustained.

See:The only path to a sharply higher stock market ‘is a bubble like the late 1920s and 1990s,’ says analyst who called rally off March lows

Remarks by Trump in a Labor Day news conference left futures under pressure, analysts said.

“We will make America into the manufacturing superpower of the world and we’ll end reliance on China once and for all, whether it’s decoupling or putting in massive tariffs like I’ve been doing already. We’re going to end our reliance on China, because we can’t rely on China,” Trump said.

Meanwhile, China on Tuesday said it would launch an initiative of its own to set global standards on data security, a move seen as an attempt to counter U.S. efforts to isolate their networks from Chinese technology.

Trump’s comments “clearly rattled the markets, which fear an escalation of tensions between the two economic superpowers as the U.S. nears its election,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note. “The increasing conflict could hurt the U.S. high tech sector the most with China already stating that it will try to create its own chip design and manufacturing business as it tries to rely less on the U.S. technological know-how.”

In coronavirus pandemic news, a group of nine drug company chief executives said Tuesday they have signed a pledge to make the safety and well-being of vaccinated individuals the top priority in developing the first COVID-19 vaccine.

Which companies are in focus?

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