U.S. stock futures fell, with technology stocks trending losses after the opening bell, as investors gauged the impact of the Fed’s most aggressive monetary policy tightening in more than a year. two decades.
S&P 500 index futures fell 0.7% on Thursday. Contracts on the tech-focused Nasdaq-100 lost 0.9% and futures on the Dow Jones Industrial Average fell 0.5%.
Regression to a later date Major US stock indexes soarwith the Dow rising more than 900 points, its biggest one-day gain since 2020. On Wednesday, central bank officials approved it. increase interest rates by half a percentage point, raising the federal funds rate to a target range of 0.75% to 1%. But it was comments by Fed Chair Jerome Powell that invigorated markets after he said officials were not actively considering raising rates by three-quarters of a percentage point, or 75 basis points, at the June meeting.
Mr. Powell’s comments helped relieve investors’ growing fear that the Fed could raise interest rates too far, too quickly, and eventually send the economy into recession.
But by Thursday, investor optimism had begun to wane. Even with larger rate hikes off the table in the coming months, investors are still facing the sharpest US monetary policy tightening since 2000 – the last time the central bank The central bank raised interest rates by half a point. Many investors are now questioning how high the Fed can raise interest rates over the next two years and how that could affect the economy and corporate profits.
On Thursday morning, those jitters were seen across the market. In pre-market trading in New York, growth stocks were particularly hard hit. Chip manufacturer
and
each lost more than 1.6%. Megacap technology shares also fell, with
down 1.6% and Netflix down 1.5%.
Higher interest rates could reduce the appeal of tech stocks by reducing the value investors place on their future earnings. Overall, higher yields also boost the appeal of fixed-income products over riskier assets like stocks.
premarket rose 10% after its revenue exceeded expectations, and it said it has seen a consolidation of global travel trends in the current quarter.
fell 11% after online markets gave guidance below expectations for the current quarter.
In the bond market, the yield on the benchmark 10-year Treasury note rose to 2.968%, from 2.914% on Wednesday. Bond prices and yields move in opposite directions. On Wednesday, bonds rallied along with stocks before depreciating.
Traders worked on the floor of the New York Stock Exchange on Wednesday.
Photo:
justin lane / Shutterstock
Assets that investors consider safer are among those set to recover on Thursday as money managers seek shelter amid the volatility. The WSJ Dollar Index, which measures the US currency against a basket of 16 other currencies, was up 0.4%. On Wednesday, the index fell 0.9%, its biggest drop since November 2020. The dollar’s status as the world’s reserve currency makes it an especially attractive haven for with investors.
Gold prices, another favorite haven, also escalated, rising 1.4% to $1,895 an ounce.
In the oil market, Brent crude, the international standard for oil, rose 0.6 percent to $110.80 a barrel.
Overseas, the continent-wide Stoxx Europe 600 rose 1.4%. Banks, technology stocks and transportation companies were among the gainers. Bank of Italy
rose 6.3% after its revenue beat analysts’ expectations. Airbus surges 8.3% after the plane maker reports increased net income and move to increase production the airline’s best-selling single-aisle aircraft A320.
up 3.1% after its first quarter profit rosedriven by soaring commodity prices.
In Asia, Hong Kong’s Hang Seng fell 0.4% and the Shanghai Composite gained 0.7%. Markets in Japan were closed for the holiday.
Write to Caitlin McCabe at [email protected]
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