US Stock futures steady after sell-off
U.S. stock futures opened little changed Thursday evening after a sharp sell-off on Wall Street, as concerns over the Federal Reserve's ability to bring down inflation while maintaining solid economic activity resurged.
Contracts on the S&P 500 drifted sideways. This came after the index shed 3.6% during the regular trading day, as technology stocks underperformed. The Nasdaq dropped 5% for its worst day since June 2020, and the Dow lost more than 1,000 points.
Stocks' violent swing from gains Wednesday to losses Thursday came as investors further appraised the implications of the Federal Reserve's latest telegraphed monetary policy path forward. While investors momentarily cheered Fed Chair Jerome Powell's suggestions that the central bank was not considering raising rates by a more drastic 75 basis points at a time, they have also had to consider whether relatively less aggressive hikes will ultimately be able to bring down inflation currently running at the hottest levels since the 1980s.
Treasury yields on the long end of the curve spiked on Thursday, and the benchmark 10-year yield rose above 3.03%. The ongoing move higher in Treasury yields and borrowing costs has weighed on growth and technology stocks, which are valued heavily on their future earnings potential.
Elsewhere, investors are also looking ahead to Friday's monthly jobs report, which is expected to reaffirm the central bank's assessment that the U.S. labor market remains extremely tight. Non-farm payrolls are expected to have risen by 380,000 in April, which would be a slight slowdown compared with March but still a solid month of job growth. And the unemployment rate is expected to dip to 3.5%, which would match February 2020's level for the lowest since 1969.
"The job market is very tight ... there's tons of geopolitical impacts, especially on things like energy and food, which creeps into everything else. Supply chains remain challenged, and we have now Chinese COVID shutdowns which make it even more stressed. "Bottom line is, there's too much demand for goods and services and not enough supply. And the Fed can't solve those real-world problems, and I think that's what's solving this indigestion."
"I don't think we've hit the bottom yet, simply because we're just starting the hiking process. There's arguably hundreds of basis points to go."
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Market no good😂