US stock futures point to an extension of Wall Street selling

U.S. stock futures fell, putting major indexes on track to extend losses after one of the worst selloffs on Wall Street since the start of the pandemic.

Futures linked to the Dow Jones Industrial Average fell 0.2%, a day after the blue-chip index plunged more than 1,000 points, its worst day since 2020. S&P 500 futures fell fell 0.3% while Nasdaq 100 heavyweight futures fell 0.5%. %. %.

Stocks have lost ground in recent days as investors tried to gauge the impact of the Federal Reserve’s plan to raise interest rates on the economy. Investors are trapped between competing hopes: these price increases will be large enough to rein in rapidly rising inflation, but not so large as to derail economic growth.

“The market is trying to balance whether central banks are more concerned about inflation or weak growth, and the market has clearly decided that they are more concerned about inflation,” said Altaf Kassam, head of the investment strategy for the EMEA region at EMEA. State Street Global Consultants. “If the Fed wants to fight inflation at all costs, it will certainly have an impact on equities.”

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It rose nearly 7% after the food delivery company announced an increase in quarterly revenue on Thursday evening.

U.S. stocks rose on Wednesday after the Federal Reserve raised interest rates by… half a percentage point, buoyed by relief that it was not actively considering bigger increases ahead, but that relief s faded on Thursday as investors reassessed expectations for stocks.

Federal Reserve Chairman Jerome Powell said on Wednesday the central bank had agreed to raise the interest rate by half a percentage point in a bid to bring down inflation from its all time high. level in four decades. Photo: Win McNamee/Getty Images

Frank Benzemra, head of Asian equity strategy at Societe Generale, said U.S. market valuations had “gone from rich to very rich” over the past 10 years as stock prices rose more than earnings. But he said that as interest rates rise, the value investors place on companies’ future cash flows declines.

In bond markets, the 10-year US Treasury yield rose to 3.074% from 3.066% on Thursday, the highest level since November 2018. Bond yields are rising as prices fall.

One of the reasons for volatile market volatility: Investors lack a clear safe haven as bonds and gold have come under pressure from rising interest rates.

“To deal with this volatility you need a buffer, but fixed income is no longer the barrier it used to be,” Kassam said.

Brent, the global oil benchmark, rose 2.2% to $113.35 a barrel, extending its recent streak of gains driven by expectations that the European Union is set to ban Russian oil imports in response to the invasion of Ukraine. The price of gold rose 0.3%.

Bitcoin fell 0.6% to $36,232, after falling more than 8% on Thursday as market selloffs encouraged investors to ditch risky bets such as cryptocurrencies.

Investors awaited data on the state of the labor market, a strong point in the US economy as the unemployment rate edged closer to a 50-year low. It also led to higher wages which added to inflationary pressures. The April jobs report, due at 8:30 a.m. ET, is expected to post another strong month for job gains.

Japanese stocks bucked the broader downtrend as the Tokyo market reopened after a three-day holiday.

Kazuhiro Nogi/AFP/Getty Images

Overseas, benchmarks fell in Asia and Europe, following losses in the United States, with the most notable declines being the tech-heavy Hang Seng index, which fell 3.8% . In China, the Shanghai Composite Index is down 2.2%. In Europe, the Stoxx Europe 600 Continental index was down 1.2%.

British Airways

Consolidated International Airlines Group, which owns it, fell more than 8% after posting an operating loss in the first quarter. Adidas fell more than 4% after warning that its sales in China would fall.

Japanese stocks bucked the broader downtrend as the Tokyo market reopened after a three-day holiday, with the Nikkei 225 index up 0.7%.

write to Will Horner at [email protected] and Rebecca Feng at [email protected]

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James T. Quintero