U.S. Stock Futures Extend Losses on Tech Slump: Markets Wrap

(Bloomberg) — US equity futures fell while stocks in Europe rose Friday after China’s pledge to ramp up stimulus helped restore confidence in the world’s second-largest economy and driver of commodity demand.

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Contracts on the S&P 500 dropped 0.8%, while Nasdaq futures retreated 1.1% amid post-earnings slumps in Amazon.com Inc. and Apple Inc. The Stoxx Europe 600 Index climbed, led by mining shares. Tesla Inc. rose in US premarket trading after Elon Musk said he doesn’t plan on selling any more shares.

Aside from the misses by tech giants, the busy earnings season has largely helped temper losses during a turbulent year. S&P 500 earnings growth is tracking 4.3% year-on-year, with 86% of companies beating estimates, according to Barclays strategists.

The Nasdaq 100 Index is down 9.3% so far in April, the worst performance since November 2008, as fears of rising rates hurt frothy growth shares and fuel risks for future profits.

Investors are assessing risks from China’s ongoing Covid challenges and economic wobbles to the impact of the Federal Reserve on the US economy and Russia’s war in Ukraine.

The latest US data showed that the world’s largest economy unexpectedly shrank for the first time since 2020. That reflected an import surge tied to solid consumer demand, suggesting growth will return imminently.

The figures underscore the debate about how much scope the US central bank has to tighten policy before the economy cracks. Markets continue to project a half-point Fed rate hike next week, though a growing chorus of investors are skeptical US policy makers will carry through with the most aggressive rate hikes since the 1980s to tame inflation.

“The Fed is caught in the crossfire between killing inflation with the risk of triggering a recession now, or buying more time for nominal growth to increase, with a potentially hefty price to be paid later on,” Pascal Blanque, chairman of the Amundi Institute , wrote in a note. “It is likely, and human, that they will sway toward the latter.”

Treasuries declined, taking the 10-year US yield to 2.85%. In foreign-exchange markets, the yen snapped a slide while staying near 20-year lows. The euro, pound and commodity-linked currencies made gains while the dollar dipped.

Meanwhile, oil rose, with West Texas Intermediate futures at about $106 a barrel, on course for their biggest monthly gains since early 2018 on the fallout from Russia’s war in Ukraine and the spread of the virus in China.

Read more: Oil Heads for Longest Run of Monthly Gains Since Early 2018

Some of the main moves in markets:

Inventory

  • Futures on the S&P 500 fell 0.8% as of 8:20 am New York time

  • Futures on the Nasdaq 100 fell 1.1%

  • Futures on the Dow Jones Industrial Average fell 0.3%

  • The Stoxx Europe 600 pink 1.1%

  • The MSCI World index rose 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.5%

  • The euro rose 0.3% to $1.0531

  • The British pound rose 0.8% to $1.2558

  • The Japanese yen rose 0.6% to 130.06 per dollar

Leaps

  • The yield on 10-year Treasuries advanced three basis points to 2.85%

  • Germany’s 10-year yield was little changed at 0.90%

  • Britain’s 10-year yield declined two basis points to 1.86%

Commodities

  • West Texas Intermediate crude rose 0.9% to $106.28 a barrel

  • Gold futures rose 1.4% to $1,916.90 an ounce

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