Stock futures traded flat Wednesday evening following a mixed session on Wall Street, with performance between the Dow and Nasdaq diverging as investors weighed concerns over inflation and higher rates that might drag on growth stocks.
Contracts on the Dow opened little changed after the index hit record intraday and closing highs during the regular session. Contracts on the Nasdaq also drifted, after the index fell 0.4% for its fourth straight day of losses – its longest losing streak since October.
So far in May, investors renewed a rotation away from technology and growth stocks, with valuations viewed as stretched especially as prospects for rising rates increase. And given the strong stock market rally over the past year, some have worried that easy positive catalysts for equities may be running out, with the economic recovery already well under way and a strong earnings season almost in the rearview mirror. Recent Bank of America data showed that institutional clients sold equities for a third week in a row last week, and hedge fund clients posted their largest outflows in over a month as equity sentiment nears euphoria.