People walk past the New York Stock Exchange in New York City on April 15, 2021.

Spencer Platt | Getty Images

Futures contracts pegged to major US stock indices fell in early morning trading Thursday after both the S&P 500 and Nasdaq Composite closed at record highs.

Dow futures lost 369 points. Contracts linked to the S&P 500 and Nasdaq 100 were both in negative territory.

Movements in futures came after a positive regular session for US markets on Wednesday.

The S&P 500 rose 0.3% to an all-time high of 4,358.13, while the Dow Jones Industrial Average climbed 104.42 points to 34,681.79. The tech-heavy Nasdaq Composite closed just above its own flatline to hit a record close.

Popular internet and technology stocks again outperformed the broader market on Wednesday as investors bought stocks of companies that prioritize growth rather than the reopened names in the energy and retail sectors that proved popular in the first half of the year.

Apple, Microsoft, and Amazon – up 1.8%, 0.8%, and 0.5% on Wednesday – were each up double-digit last month. While traders have cited several reasons for switching back to big tech, most mention a significant drop in bond yields when discussing the move.

The decline in benchmark 10-year government bond yields continued on Wednesday as the interest rate fell to 1.296%, its lowest level since February. Higher returns reduce the value of future income relative to current income, which means that the appetite for growth stocks tends to increase when interest rates fall.

“The 40 basis point decline in benchmark ten-year government bond yields since late March suggests that global earnings after yield remain a strong force despite the Fed’s desire to keep the economy running hot,” said Steven Ricchiuto US chief economist at Mizuho Securities wrote on Tuesday.

“A stronger currency, increased virus worries overseas and the associated demand for long-term Treasury bills and bonds imply lower inflation expectations and an increased risk of importing global deflation,” he added.

Looking ahead to Thursday’s meeting, investors will ponder the latest unemployment claims figures from the Department of Labor. The weekly update gives Wall Street regular insights into the pace of layoffs in the U.S. economy, which has declined during the introduction of the Covid-19 vaccine.

According to the Dow Jones, economists expect 350,000 first-time applicants for unemployment benefits by the week ending July 3.