• Nasdaq 100 futures extended declines, last down 1.2%, while Dow futures gained 0.8%, reflecting a shift from tech to value.
  • Traders are rotating out of high-growth stocks amid uncertainty over interest rates and upcoming macro data.
  • The divergence highlights contrasting sentiment between tech-heavy and blue-chip sectors.

Markets Split as Tech Sags, Industrials Rise

Nasdaq 100 futures slipped further on Thursday, falling 1.2%, while Dow futures climbed 0.8%, extending a pattern of sector rotation that has gripped markets this week. The move suggests investors are paring exposure to high-valuation tech names in favor of more cyclical, value-oriented stocks, according to traders.

“We’re seeing a classic rotation out of growth and into value,” said a senior equity strategist at a major bank, speaking on condition of anonymity. “The macro outlook is uncertain, and positions are being adjusted ahead of key data.”

The divergence comes as the market digests mixed signals on inflation and the Federal Reserve’s next moves. Fed funds futures now price in a 60% chance of a rate cut in June, down from 75% a week ago, according to CME data. A stronger-than-expected jobs report earlier this month has fueled speculation that the central bank may hold rates steady longer.

Short-term catalysts for the move include upcoming consumer price index data and comments from Fed officials, which could sway rate expectations. “Any hint of sticky inflation would hit tech multiples hard,” the strategist added. “The Dow is less sensitive to that.”

Technology stocks have been under pressure this week, with the Nasdaq 100 down 3% from its recent high. In contrast, the Dow has held steady, supported by gains in industrials and financials. The market’s risk-off tone is also evident in volatility gauges, with the VIX rising 0.9 points to 18.5.

Meanwhile, global factors are adding to the unease. Concerns over trade tensions and export controls have weighed on semiconductor stocks, a key component of the Nasdaq. “Investors are nervous about the regulatory backdrop for big tech,” said a portfolio manager at a New York-based hedge fund.

Analysts caution that futures moves can be short-lived, but the current divergence is notable. “If this persists, it could signal a broader change in market leadership,” the strategist said. “We’re watching for confirmation in the cash session.”

Correction: An earlier version of this article misstated the timeframe for rate cut expectations. The correct figure is a 60% chance in June.

  • Market participants are bracing for volatility as key data looms.
  • Attempts to reach the Fed for comment were unsuccessful.