US stock futures point to an extension of Wall Street selling

Stocks have been losing ground in recent days as investors tried to gauge the impact of the Federal Reserve’s plan to raise interest rates on the economy. Investors are trapped between competing hopes: These price increases will be large enough to tame rapidly rising inflation, but not so large that they will derail economic growth.

“The market is trying to balance whether central banks are more concerned about inflation or weak growth, and the market has clearly decided they are more concerned about inflation,” said Altaf Kassam, Head of Investment Strategy for EMEA at EMEA. State Street Global Consultants. “If the Fed is going to fight inflation at all costs, it will certainly have an impact on stocks.”

before the opening bell,

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It rose nearly 7% after the food delivery company reported a Increase in quarterly revenue late on Thursday.

US stocks rose on Wednesday after the Federal Reserve raised interest rates by… half a percentage pointbuoyed by relief that it was not actively considering larger increases ahead, but that relief faded Thursday as investors reassessed stock expectations.

Frank Benzemra, head of Asian equity strategy at Société Générale, said US market valuations have “goed from rich to very rich” in the past 10 years as stock prices have risen more than earnings. But he said that as interest rates rise, the value investors place on companies’ future cash flows is decreasing.

In the bond markets, the yield on the 10-year US Treasury rose to 3.074% from 3.066% on Thursday, the highest level since November 2018. Bond yields rise with lower prices.

One reason for the volatile volatility in the markets: Investors lack a clear haven as bonds and gold have come under pressure from rising interest rates.

“To deal with this volatility, you need a reserve but fixed income is not the barrier it used to be,” said Mr. Kassam.

Brent crude, the global oil standard, rose 2.2% to $113.35 a barrel, extending its recent streak of gains driven by expectations that the European Union is about to ban Russian oil imports in response to the invasion of Ukraine. Gold prices rose 0.3%.

Bitcoin fell 0.6% to $36,232, after falling more than 8% on Thursday as market selling encouraged investors to exit risky bets such as cryptocurrencies.

Investors were waiting for data on the state of the labor market, a strong point for the US economy as the unemployment rate approached a 50-year low. This also led to higher wages which added to inflationary pressures. The April jobs report, due at 8:30 AM ET, is expected to show another strong month for job gains.

Abroad, benchmark indices slipped in both Asia and Europe, tracking losses in the United States, with declines most notable for the tech-heavy Hang Seng Index, which fell 3.8%. In China, the Shanghai Composite Index is down 2.2%. In Europe, the Stoxx Europe 600 Continental Index was down 1.2%.

British Airways

Consolidated International Airlines Group, which owns it, fell more than 8% after reporting an operating loss in the first quarter. Adidas fell more than 4% after warning that its sales in China were expected to decline.

Japanese stocks bucked the broader downtrend as the Tokyo market reopened after three days of holidays, with the Nikkei 225 index up 0.7%.

write to Will Horner at [email protected] and Rebecca Feng at [email protected]