Futures bounce after tech rout sends Nasdaq into correction

(Reuters) – Nasdaq futures bounced on Wednesday following a brutal sell-off in heavyweight technology stocks that sent the Nasdaq Composite index into correction territory in just three sessions.

The tech-heavy stock index <.IXIC> tumbled 4.1% on Tuesday, bringing total losses since Sept. 2 to 10%, with declines led by stocks such as Amazon.com Inc , Facebook Inc and Netflix Inc after a rally dominated by the so-called “stay-at-home” winners.

Investors were also unnerved by heavy trades in tech stock call options by SoftBank Group Corp <9984.T> during the run up in U.S. equities. A measure of demand for protective put options in relation to call options, used to bet on upside, has risen sharply.

Tesla Inc surged 7% in premarket trading after shedding about $80 billion of its market capitalization in the previous session following its surprise exclusion from the S&P 500.

At 5:37 a.m. ET, Nasdaq 100 e-minis were up 196 points, or 1.77%, Dow e-minis <1YMcv1> were up 140 points, or 0.51%, and S&P 500 e-minis were up 25.75 points, or 0.77%.

Wall Street’s fear gauge <.VIX> slipped further away from near three-month highs as stock markets also shrugged off news about AstraZeneca pausing global trials of its experimental COVID-19 vaccine after an unexplained illness in a participant.

Lululemon Athletica Inc dropped 4.9% after the yogawear maker forecast a drop in current-quarter adjusted profit due to higher marketing expenses.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta)