(RTTNews) - Stocks are likely to come under pressure in early trading on Friday, giving back ground after ending the previous session mostly higher. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.2 percent.
Profit taking may contribute to initial weakness on Wall Street following recent strength in the markets, which lifted the Nasdaq and S&P 500 to record highs.
Technology stocks may lead the early pullback, as reflected by the 1.7 percent slump by the tech-heavy Nasdaq 100 futures.
Shares of Intel (INTC) are plummeting by more than 5 percent in pre-market trading, while shares of Micro (MU) are plunging by more than 4 percent and shares of Nvidia (NVDA) are tumbling by more than 3 percent.
A sharp increase in treasury yields is also likely to weigh on the markets, with the yield on the benchmark ten-year note surging to its highest levels in almost a year.
The spike in treasury yields comes as recent data showing significant accelerations in the pace of consumer and producer price inflation has led to concerns about the outlook for interest rates.
CME Group's FedWatch Tool is currently indicating a 38.9 percent chance rates will be a quarter point higher following the Federal Reserve's last meeting of the year, up from just 13.7 percent a week ago.
The downward momentum on Wall Street also comes amid a sharp increase by the price of crude oil, as U.S. crude oil futures are surging by more than 3 percent.
The jump in oil prices comes as the summit between President Donald Trump and his Chinese counterpart Xi Jinping produced warm words but yielded little progress on the U.S. war with Iran.
Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of April. Industrial production is expected to rise by 0.3 percent in April after falling by 0.5 percent in March.
After ending Wednesday's session modestly lower, the Dow showed a strong move back to the upside during trading on Thursday, closing above 50,000 for the first time in three months.
The Nasdaq and the S&P 500 also moved higher, adding to Wednesday's gains and once again reaching new record closing highs.
The major averages all finished the day firmly positive but off their highs of the session. The Dow advanced 370.26 points or 0.8 percent to 50,063.46, the Nasdaq jumped 232.88 points or 0.9 percent to 26,635.22 and the S&P 500 climbed 56.99 points or 0.9 percent to 7,501.24.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. China's Shanghai Composite Index slumped by 1 percent, Japan's Nikkei 225 Index tumbled by 2 percent and South Korea's Kospi plunged by 6.1 percent.
The major European markets have also shown significant moves to the downside. While the French CAC 40 Index is down by 1.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 2 percent.
In commodities trading, crude oil futures are surging $3.26 to $104.43 a barrel after inching up $0.15 to $101.17 a barrel on Thursday. Meanwhile, after falling $21.40 to $4,685.30 an ounce in the previous session, gold futures are plunging $132.20 to $4,553.10 an ounce.
On the currency front, the U.S. dollar is trading at 158.55 yen versus the 158.35 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1622 compared to yesterday's $1.1668.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
