Stock futures fall as tech-led drop extends, crude dips

Stock futures traded mixed Tuesday morning as technology stocks came under further pressure, as investors further mulled the market implications of Federal Reserve Jerome Powell’s renomination to lead the central bank.

Contracts on the S&P 500 ticked down. A day earlier, the blue-chip index had set an all-time intraday high before pulling back to end in the red, with a drop in technology stocks dragging on the index. U.S. West Texas intermediate crude oil futures (CL=F) dropped more than 1% after the White House announced it would be releasing a total of 50 million barrels of oil from the Strategic Petroleum Reserve (SPR), in tandem with similar moves from China, Japan, India and South Korea and the U.K., to try and ease rising energy prices with additional supply. 

Shares of Zoom Video Communication (ZM) fell in early trading even after the company posted better-than-expected quarterly revenue growth and full-year guidance, suggesting usage of the video conferencing company’s software was holding up more strongly than expected during the reopening. Companies including Nordstrom (JWN), The Gap (GPS) and Autodesk (ADSK) are set to report quarterly results on Tuesday.

Federal Reserve Chair Jerome Powell’s renomination to the top leadership position at the central bank captured market attention this week, with many investors reacting favorably to the likelihood that the Fed’s previously telegraphed monetary policy framework would remain in place with Powell’s reappointment. That includes expectations for current asset-purchase tapering to take place through the middle of next year, and for at least one interest rate hike to take place before the end of 2022.

“Continuity at a time of such extraordinary uncertainty is certainly welcome news. We have extraordinary uncertainty because we’re pivoting from the phase of the cycle where the Fed had been shoring up the recovery from the pandemic-induced recession, and … it did avoid a meltdown in financial markets,” Diane Swonk, Grant Thornton chief economist, told Yahoo Finance Live. “But now we’ve got very easy financial market conditions and we’re dealing with inflation. And having to pivot to dealing with inflation and tamp it down without derailing the recovery — that’s a very hard thing to pull off. We’ve not seen the Fed actually chase inflation down since the early 1980s.”

President Joe Biden also nominated Fed Governor Lael Brainard – previously viewed as a potential candidate for the Fed Chair position to replace Powell — as Vice Chair of the Board of Governors for the Fed. With these two nominations in place, market participants have turned their attention to who might fill he three vacant and soon-to-be vacant seats on the Fed Board, which includes the key Vice Chair for Supervision role. Biden said in a press statement Monday morning he expected to announce those appointments “beginning in early December.”

“Political decisions like this are competitions between affinity — you like someone in your own party — and convenience — what can you get the Senate to do for you, and will markets receive it well? You have to view the Powell-Brainard picks as part … of a bigger package,” Vincent Reinhart, Dreyfus-Mellon chief economist and macro strategist, told Yahoo Finance Live. “The White House is going to have three new governors to appoint, and presumably that’s going to tilt more progressive. So bottom-line, six months from now, the group of people that Chair Powell has to wrangle to make decisions is going to be more dovish than it is today.”

7:33 a.m. ET Tuesday: Stock futures mostly lower 

Here’s where markets were trading Tuesday morning:

  • S&P 500 futures (ES=F): -1 point (-0.02%), to 4,678.75

  • Dow futures (YM=F): +21 points (+0.06%), to 35,592.00

  • Nasdaq futures (NQ=F): -26.75 points (-0.16%) to 16,355.25

  • Crude (CL=F): -$0.42 (-0.55%) to $76.33 a barrel

  • Gold (GC=F): -$9.30 (-0.51%) to $1,797.00 per ounce

  • 10-year Treasury (^TNX): +2.6 bps to yield 1.651%

6:06 p.m. ET Monday: Stock futures open slightly higher

Here’s where markets were trading Monday evening:

  • S&P 500 futures (ES=F): +7.5 points (+0.16%), to 4,687.25

  • Dow futures (YM=F): +49 points (+0.14%), to 35,620.00

  • Nasdaq futures (NQ=F): +28.5 points (+0.17%) to 16,410.50

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021.  REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021. REUTERS/Brendan McDermid

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter