Stock market news live updates: Stock futures hold lower after weekly jobless claims reach lowest in 52 years

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Stock futures dipped Wednesday morning, holding lower following an extended rout in technology stocks, as investors digested a deluge of economic data before a holiday market closure. 

Contracts on each of the S&P 500, Dow and Nasdaq pointed to lower opens. The three major indexes held lower even after new Labor Department data showed new weekly jobless claims fell far more than expected to their lowest level since November 1969, underscoring the current tight labor market conditions. The 10-year Treasury yield rose to near 1.7% amid these further signs of a firming economic recovery.

Rising interest rates have coincided with a selloff in tech and growth stocks this week, with the Nasdaq dropping another 0.5% on Tuesday after Monday’s more than 1% decline. 

“Initially, the markets were happy with the FOMC decision [for Fed Chair Jerome Powell’s renomination] in the sense that it was sort of a continuity play to some degree. But then rates started to rise, and a lot of folks read rising rates as negative for big-cap tech,” Stuart Kaiser, UBS head of equity derivatives research, told Yahoo Finance Live. “So I think the tradeoff we’re going to have here is that, tech has been market leadership — it’s obviously a strong earnings growth and free cash flow engine for U.S. equities — but if you believe it’s going to come under pressure from higher yields, then you end up with kind of a difficult Catch-22.”

Investors are set to receive more economic data later on Wednesday ahead of the Thanksgiving Day market holiday, with both the U.S. stock and bond markets set to close all day Thursday. Importantly, the Bureau of Economic Analysis will release the October personal consumption expenditures (PCE) deflator, offering an updated look at the extent of the price increases still reverberating through the U.S. economy. 

The headline PCE deflator is expected to rise by 5.1% in October over last year for its fastest annual growth rate in more than three decades. Taken in tandem with a bevy of other data pointing to persistently high inflation, investors are speculating that the Federal Reserve will step in and raise benchmark interest rates from their near-zero levels next year to try and stem rising prices. 

According to other analysts, the market action this week — with a renewed rotation away from technology and growth stocks in the face of rising rates — could presage the investing environment for next year. 

“[Tuesday] might be an example of what we see more of next year as the Fed moves into a mode of withdrawing liquidity from the markets and ending these pandemic-era policies, perhaps with rate hikes at the end of the year,” Jeffrey Kleintop, Charles Schwab chief global investment strategist, told Yahoo Finance Live. “And that means higher-valuation stocks, well, they tend to not do as well in environments of rising interest rates and tighter financial conditions.” 

“So you may want to look to be in those sectors that are maybe trading closer to their average valuations, looking to leadership like financials, energy,” he added. “The only caveat to that is when we see these upticks in COVID cases globally, it tends to favor those lockdown defensives like technology.” 

8:45 a.m. ET: New jobless claims reach lowest in 52 years, Q3 GDP revised up

Economic data Wednesday morning came in mostly stronger-than-expected, with a new print on the labor market handily topping estimates while the second estimate of U.S. economic activity in the third quarter was revised higher. 

The Labor Department reported Wednesday that new weekly jobless claims came in at 199,000 for the week ended Nov. 20. This was the lowest level since November 1969, and was much better than the 260,000 new claims expected.

Meanwhile, the Bureau of Economic Analysis released its second estimate on third-quarter U.S. gross domestic product. Quarterly GDP was revised up to a 2.1% annualized rate for the three months ended in September, or above the 2.0% rate previously reported. This still represented a marked slowdown from the prior quarter’s 6.7% annualized rate of growth, however. 

The improvement from the prior estimate came as personal consumption, the biggest component of U.S. economic activity, was revised up to a 1.7% pace, from the 1.6% rate previously reported. 

7:16 a.m. ET Wednesday: Stock futures drop ahead of economic data

Here were the main moves in markets ahead of the opening bell

  • S&P 500 futures (ES=F): -13.75 points (-0.29%), to 4,674.75

  • Dow futures (YM=F): -119 points (-0.33%), to 35,647.00

  • Nasdaq futures (NQ=F): -59 points (-0.36%) to 16,253.00

  • Crude (CL=F): +$0.17 (+0.22%) to $78.67 a barrel

  • Gold (GC=F): +$3.40 (+0.19%) to $1,787.20 per ounce

  • 10-year Treasury (^TNX): -0.5 bps to yield 1.66%

6:16 p.m. ET Tuesday: Stock futures open lower 

Here’s where markets were trading Tuesday evening:

  • S&P 500 futures (ES=F): -4.75 points (-0.1%), to 4,683.75

  • Dow futures (YM=F): -27 points (-0.08%), to 35,739.00

  • Nasdaq futures (NQ=F): -17.25 points (-0.11%) to 16,294.75

NEW YORK, NEW YORK – NOVEMBER 15: A trader works on the floor of the New York Stock Exchange (NYSE) on November 15, 2021 in New York City. Following positive economic news out of China, stocks were up in morning trading on Monday with investors looking at retail sales and earnings results out from major U.S. companies later this week. (Photo by Spencer Platt/Getty Images)

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