Adam Johnson, portfolio manager at Adviser Investments, explains why he’s optimistic as mounting crises fuel recession fears.
US stock futures traded lower ahead of the last trading day of the week on fears that interest rates will rise faster than expected.
Major futures indexes are pointing to a 0.2% drop as Wall Street’s trading session gets underway.
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Speaking at a panel hosted by the International Monetary Fund, Federal Reserve Chair Jerome Powell said the Fed must act faster than it has been to tackle high inflation. He also warned that sharp rate hikes are likely in the coming months.
Federal Reserve Chairman Jerome Powell (AP Photo/Jacquelyn Martin, file) (AP Photo/Jacquelyn Martin, file/Associated Press)
Oil prices fell on Friday morning after a week of worries over rate hikes, global growth and COVID-19 lockdowns in China hit demand.
U.S. West Texas Intermediate (WTI) crude oil futures fell $2.05, or 1.9%, to $101.76 a barrel.
Brent futures fell $1.91, or 1.7%, to $106.42 a barrel.
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Friday’s earnings announcements include telecom giant Verizon Communications, hospital operator HCA Healthcare, consumer finance firm American Express, oilfield services and offshore drilling giant Schlumberger, household products maker Kimberly-Clark and more.
Trading specialists on the floor of the New York Stock Exchange. (AP Photo/Richard Drew) ((AP Photo/Richard Drew) / AP Newsroom)
The economic calendar is short to end the week. Market research firm IHS Markit releases its flash manufacturing and services PMIs for April. Watch for manufacturing activity down six tenths of a point to 58.2. Services activity is expected to remain steady at 58.0. A value above 50 indicates an expanding sector.
Bitcoin traded above $40,000.
Powell’s interest rate comments largely drove stocks in Asia lower.
Japan’s benchmark Nikkei 225 fell 1.6%, Hong Kong’s Hang Seng fell 0.2% and China’s Shanghai Composite fell 0.2%.
| ticker | security | Last | To change | To change % |
|---|---|---|---|---|
| Me: DJI | DOW JONES AVERAGES | 34792.76 | -368.03 | -1.05% |
| SP500 | S&P500 | 4393.66 | -65.79 | -1.48% |
| I: COMP | NASDAQ COMPOSITE INDEX | 13174.651547 | -278.41 | -2.07% |
Powell’s comments also sent stocks plummeting on Wall Street. The S&P 500 closed 1.5% lower at 4,393.66 after rising 1.2% initially. The Dow Jones Industrial Average fell 1% to 34,792.76 and the Nasdaq fell 2.1% to 13,174.65.
More than 80% of stocks in the S&P 500 fell Thursday, with technology stocks accounting for a large part of the drop. Microsoft fell 1.9% and chipmaker Nvidia fell 6%.
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Shares of Gap Inc traded more than 11% lower in premarket trading after the company lowered its guidance for quarterly sales and blamed its Old Navy brand for the execution issues. Gap also said that Old Navy brand leader Nancy Green is leaving the company and the company’s chief executive officer, Sonia Syngal, will lead the team until a replacement is named.
American Airlines rose 3.8% after telling investors it will turn a profit in the second quarter as more people return to travel.
Tesla rose 3.2% after the electric car maker reported strong sales and a seven-fold increase in profit despite global supply chain kinks.
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Bond yields have gained ground as investors prepare for higher interest rates. The yield on the 10-year government bond was 2.92% on Friday.
The Associated Press contributed to this report.