U.S. stock index futures fell on Wednesday ahead of key economic data as rising Treasury yields spurred selling in megacap growth stocks, with recession fears from aggressive central bank rate hikes weighing on risk appetite.
Rate-sensitive technology and related stocks like Nvidia Corp, Amazon.com, Apple Inc and Alphabet Inc fell between 0.8% and 1.1% in premarket trading.
Shares of U.S.-listed Chinese companies including Alibaba Group and JD.com were up between 0.9% to 3.3%, tracking a jump in their Hong Kong counterparts.
Market Snapshot
At 07:50 a.m. ET, Dow e-minis were down 275 points, or 0.91%, S&P 500 e-minis were down 34.25 points, or 0.90%, and Nasdaq 100 e-minis were down 102.75 points, or 0.88%.
Pre-Market Movers
Tesla, Twitter – The electric vehicle maker slid 1.6% after CEO Elon Musk reversed course on his Twitter purchase, proposing once again to take over the social media company for $54.20 per share. He had previously tried to back out of buying the company, but Twitter sued him to go through with the purchase. Twitter shares dipped slightly after rallying on the news Tuesday.
Automakers – Ford rose 1.5% after Morgan Stanley upgraded the stock to overweight from equal weight, citing a potential buying opportunity after the stock's recent decline. General Motors, meanwhile, dipped 2.1% after the firm lowered its price target on the stock.
Morgan Stanley, Goldman Sachs – Shares of the two banks flat, respectively, after Atlantic Equities downgraded both stocks due to the potential of declining investment banking volume.
Airbnb – The online travel platform was up 1.1%, outperforming the broader market, after Bernstein initiated coverage of the stock with an outperform rating and a price target that implies upside of about 30% from Tuesday's close.
Cruise lines – The major cruise lines dipped after surging during Tuesday trading, when Norwegian Cruise Line said it would drop Covid-19 testing, masking and vaccination requirements. The stock was down 1.9% on Wednesday, while Carnival and Royal Caribbean lost 1.9% and 2%, respectively.
Bionano Genomics – Shares jumped 9.8% after the company published a study on using optical genome mapping to investigate liver cancer.
Market News
Musk Revives $44 Billion Twitter Bid, Aiming to Avoid Trial
Elon Musk revived a bid to buy Twitter Inc. at the original price of $54.20 a share, backtracking on his effort to quit the deal and potentially avoiding a contentious courtroom fight.
Musk made the proposal in a letter to Twitter on Monday, according to a filing with the Securities and Exchange Commission that confirmed a Bloomberg report. San Francisco-based Twitter said it received the letter and intends to close the deal at the agreed-upon price, without commenting specifically on how it will respond to Musk.
Apple Will Be Forced to Use New Charger After EU Votes for USB-C
Members of the European Parliament voted to force companies such as Apple Inc. to adapt products that don’t already feature a standard USB-C charger to use one. This would include iPhones, in Apple’s case.
A total of 602 lawmakers voted for the plan on Tuesday, with 13 against, and eight abstaining.
The deal, provisionally agreed in June between the commission and the European Union’s 27 countries, still needs to get the final sign-off from the EU member states. The rules are likely to be written into law at the beginning of 2023.
OPEC+ Heads for Deep Supply Cuts, Clash With U.S.
OPEC+ looks set for deep cuts to its oil output targets when it meets on Wednesday, curbing supply in an already tight market despite pressure from the United States and others to pump more.
The potential OPEC+ cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago due to fears of a global economic recession, rising U.S. interest rates and a stronger dollar.
US Mortgage Rates Rise for Seventh Week to Highest in 16 Years
US mortgage rates jumped to a 16-year high of 6.75%, marking the seventh-straight weekly increase and spurring the worst slump in home loan applications since the depths of the pandemic.
The contract rate on a 30-year fixed mortgage rose nearly a quarter percentage point in the last week of September, according to Mortgage Bankers Association data released Wednesday. The steady string of increases in mortgage rates resulted in a more than 14% slump last week in applications to purchase or refinance a home.