US Stock Market Futures: Dow Jones, S&P 500, Nasdaq Dip Points To Friday Opening Drop

Thursday's surprising rally that lifted the Dow Jones Industrial Average 377 points higher and took the S&P 500 and the NASDAQ along with it for the ride stands to become a one-day wonder as futures for all three indices trended downwards Thursday night.

Stock futures were largely flat Thursday evening as investors fret over the unrelenting clash between President Donald Trump and his medical experts over reopening the U.S. economy. The lack of positive news in the fight against COVID-19 is also weighing heavily on investor sentiment. Questions are also becoming more persistent about the market's over valuation.

Dow Jones futures slid 15 points hinting at a Friday opening decline of 25 points. S&P 500 and NASDAQ futures also pointed to a Friday opening drop that might get worse depending on the gloom generated by the upcoming figures.

On Thursday, the Dow rallied 1.62%, the S&P 500 advanced 1.15%, while the NASDAQ gained 0.91%. Gains in bank and energy stocks boosted the major indices. Apple Inc., Alphabet Inc. and other major tech stocks saw their already massive valuations rise again.

Analysts, however, noted Wall Street is headed for its biggest weekly decline since late March despite the cheery outcomes. The Dow and S&P 500 both ended Thursday down more than 2% for the week. The NASDAQ had lost nearly 2% week-to-date.

It's apparent this will be the averages’ worst weekly performances since the week ending March 20. The Dow, S&P 500 and NASDAQ have all fallen at least 12.6%. The Dow and the S&P 500 are more than 29% above the intraday low reached March 23. The NASDAQ has skyrocketed 35% in that same time.

“Given the amount of uncertainty about this crisis that still looms, we should not be surprised by the setbacks we’ve seen in markets this week,” said Scott Knapp, chief market strategist at mutual insurance company CUNA Mutual Group.

Billionaire investor and hedge fund manager Stanley Druckenmiller is raising questions about the market’s overall valuation. Druckenmiller said the risk/reward for owning equities right now is the worst of his career.

Stocks ended lower Wednesday as investors wound-up spooked by U.S. Federal Reserve Chair Jerome Powell and his dire outlook on the economy. Powell said there are chances of a longer-than-expected recession in the near term if Congress doesn’t inject further fiscal stimulus.

Powell pointed out the “path ahead is both highly uncertain and subject to significant downside risks.” He said the untrammeled spread of COVID-19 raises many questions such as how quickly can it be brought under control and when will any vaccine make an appearance.

Powell's glum outlook hurled all three indices into the red on Wednesday. The Dow closed at 23,247.97 after declining 2.2%, the S&P 500 reached 2,820.00 after falling 1.8% while the NASDAQ hit 8,863.17 after sliding 1.6% lower.