July 5, 2022

The stock futures fall as the post-Fed rally fades

As US stock futures and global indices plummeted, the post-Wall Street Fed rally was not set to last.

The futures for the S&P 500 fell 2.1% on Thursday. The broader index increased by 1.5% To stop the five-day series of defeats. Blue-chip Dow Jones Industrial Average futures lost 1.8%, while Nasdaq-100 futures fell 2.5%, leading to sharp losses in technology stocks after the opening hour.

Abroad, European indices started with a sharp decline. The Pan-Continental Stocks Europe 600 index fell 1.9%, causing sharp losses for ratio-sensitive technology companies and economically sensitive retail stocks. In Asia, the indices were very mixed, with Japan’s Nikkei 225 up 0.4% and Hong Kong’s Hong Kong down 2.2%.

Just before the opening hour, shares of technology companies fell

Nvidia,

Amazon

And

Microsoft

Each decreasing by 2.7% or more.

Twitter

The stock was an exception, then rose 2.6% The Wall Street Journal reported That

Tesla

Chief Executive

Elon Musk

He is expected to speak to its staff on Thursday, confirming his desire to buy the social media company.

Central Bank on Wednesday Raised its benchmark ratio by 0.75 percentage points, Its biggest rise in nearly three decades, is in the race to curb widespread inflation. As investors welcomed the move to ease inflation, the much-anticipated move sparked a rally on Wall Street, which shattered on Thursday as investors thought of the risk to the economy following years of low prices and moderate consumer price rises.

“The market is struggling with the reality that a regime change is happening,” said Iofin David, Monetta’s chief investment officer. “Investors are worried about inflation or the central bank crushing the economy.”

Federal Reserve Chairman Jerome Powell suggested on Wednesday that an “unusually large” rate hike would not be common, but that he would soon open the door to another 0.75-percent increase soon.

Ms. David said that if investors felt that the Fed was advancing faster than inflation, that amount of interest rate hikes could calm investors. “This will lead to even more tension in the market,” he said.

Global central banks are rushing to tighten policy in the face of similar economic woes. The Swiss central bank surprised analysts on Thursday by raising interest rates from 0.5 percent to a negative 0.25 percent. Economists expect bank officials to keep interest rates unchanged.

By the end of Thursday, the Bank of England is expected to raise its core interest rate from 1% to 1.25%, making it its fifth move in five sessions.

Yields on the benchmark 10-year US Treasurys rose to 3.400% from 3.389% on Wednesday.

The WSJ dollar index, which measures the dollar against its peers’ basket, rose 0.1%.

In commodity markets, Brent crude was down 0.5% at $ 118.00 a barrel, the international benchmark. Gold prices rose 0.8 percent.

The weekly unemployment claim data is expected to show that 220,000 Americans applied for unemployment benefits in the week ending June 11, at 8:30 a.m. ET. The jobs market is a strong part of the economy, but central bank officials have signaled. Weak employment statistics May be the necessary result The central bank’s attempt to control inflation.

Shares advanced on Wall Street on Wednesday after the Federal Reserve closed its interest rate.


Photo:

Justin Lane / Shutterstock

Write to Will Horner at [email protected]

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