Futures for the Nasdaq fell Friday as a global selloff in technology stocks extended ahead of the May jobs report. The S&P 500 rose 0.4% to 7,584.31 on Thursday while the Dow hit a record 51,561.93, but tech weakness persisted. The nonfarm payrolls data due at 8:30 a.m. ET will determine whether the rotation out of growth stocks accelerates.
Futures for the Nasdaq led U.S. equity indexes lower Friday as a global selloff in technology stocks deepened ahead of the May nonfarm payrolls report, the most anticipated data point this week for markets weighing the path of interest rates.
"The market is pricing in two scenarios — either the jobs number confirms the soft landing and we rally, or it comes in hot and the selloff accelerates," said Sarah Lin, equity strategist at Edgen.
The S&P 500 rose 0.4% to 7,584.31 on Thursday, its 10th gain in 11 sessions, while the Dow Jones Industrial Average surged 1.7% to a record 51,561.93. The Nasdaq composite slipped 0.1% to 26,830.96, dragged by weakness in large-cap technology names even as Broadcom delivered a strong profit report. The Russell 2000 added 1.4% to 2,935.33, reflecting a rotation into smaller companies as oil prices fell close to 3% and Treasury yields dipped.
The pre-market weakness extends a pattern of sector rotation that defined Thursday's session. Banks and small-cap stocks led the rally while megacap technology names lagged, a reversal from the AI-driven momentum that pushed the S&P 500 to a record earlier in the week. The 10-year Treasury yield edged lower alongside falling crude prices, providing support for rate-sensitive sectors. For the week, the S&P 500 is up 0.1%, the Dow has gained 1%, and the Nasdaq is down 0.5%, highlighting the divergence between value and growth. The Russell 2000 is up 0.5% for the week and has gained 18.3% year to date, outpacing the S&P 500's 10.8% advance.
The jobs report, scheduled for release at 8:30 a.m. Eastern Time, is the primary catalyst for Friday's session. A stronger-than-expected print could reinforce the case for the Federal Reserve to hold rates steady, potentially triggering a relief rally in beaten-down tech names. A weak number would revive bets on rate cuts but could also signal economic softening, adding a layer of uncertainty for equity markets. For the year, the Nasdaq has gained 15.4%, more than double the Dow's 7.3% advance, making the tech-heavy index particularly sensitive to any shift in the rate outlook. The Russell 2000's 18.3% year-to-date gain reflects the broader market's appetite for value-oriented names, a trade that could accelerate or unwind depending on the payrolls data. The selloff in tech futures Friday suggests investors are positioning defensively ahead of the release, with the potential for the move to extend to other sectors if the data disappoints.
This article is for informational purposes only and does not constitute investment advice.
