Wall Street is set to open with little change on Friday morning, in a market still marked by sector rotation at the expense of major technology stocks.

Half an hour before the opening, the Dow Jones futures contract was down 0.2%, while the Nasdaq 100 contract was down around 0.1%, suggesting an uncertain start to the session.

The week just ended was characterized by a sharp increase in decorrelation between the two leading indices, a sign that investors are now keen to rebalance their portfolios.

The Dow thus set a new all-time record on Wednesday, climbing above 41,000 points.000 points, giving it a weekly gain of more than 1.6%.

Conversely, the Nasdaq Composite, with its stronger technology component, is currently losing more than 2.8% over the week as a whole.

Technology giants are likely to continue to suffer from arbitrage against them, in favor of more traditional stocks, as illustrated by the decline in Amazon, which is down more than 5% over the week, and Nvidia, which is down 6% since Monday.

This rotation is taking place at a time when many analysts have been questioning the sector's high valuations over the past few weeks, particularly those of spectacular growth companies such as the "Magnificent Seven".

The increasingly real prospect of Donald Trump being elected President of the United States in November has also triggered a shift in investment flows towards small and mid-caps, which had lagged since the start of the year.

The Russell 2000 index gained more than 2% over the week, fuelling the feeling that individual investors are returning to this segment, which could benefit from the Republican candidate's 'America First' policy.

It now remains to be seen whether this trend reversal will last over time.

For the time being, this reversal represents only a small blip in a very distinct long-term trend, so there's still a long way to go to know whether a real rotation is at work", moderates Jim Reid, market analyst at Deutsche Bank.

"The coming weeks are going to be interesting on this point", he stresses.

There are no major statistics on today's agenda, and the morning's numerous releases (American Express, Halliburton, SLB and Travelers) are being greeted with very mixed reviews.

Netflix is expected to be in the green, with the video-on-demand giant's solid quarterly results published last night more than offsetting an outlook that analysts feel is a little lacklustre.

Copyright (c) 2024 CercleFinance.com. All rights reserved.