U.S. stock index futures edged lower on Friday after a three-day selloff on Wall Street, as evidence of a resilient U.S. economy spurred fears that the Federal Reserve would hold interest rates for longer than previously expected.
Wall Street’s main indexes have shed over 2% each this week after a spate of strong economic data, including a fall in weekly jobless claims, caused investors to dial back expectations of rate cuts and drove up government bond yields.
The yield on the 10-year Treasury note hit a ten-month high of 4.328% in the previous session and came within a whisker of its highest level since 2007. [US/]
“The relative strength of the U.S. economy is prompting fears of rates sticking higher for longer across the Atlantic and a potential shift from the current easing of inflationary pressures. This is reflected in a big surge in U.S. government bond yields,” said Russ Mould, AJ Bell investment director.
On Friday, big technology and growth stocks slipped in premarket trade even as Treasury yields eased, with Tesla (NASDAQ: TSLA) down 1.7% and leading declines.
Risk sentiment has also been hurt in recent days by China’s sluggish economic recovery and growing concerns about its property market. U.S.-listed shares of Chinese companies JD (NASDAQ:JD).Com and Alibaba (NYSE: BABA) Group fell 3.6% and 2.4% respectively.
Among major movers of the day, Applied Materials (NASDAQ:AMAT) rose 3.2% after the chip equipment maker forecast fourth-quarter profit above analysts’ estimates and posted better-than-expected third-quarter earnings.
Estee Lauder (NYSE:EL) and Deere (NYSE:DE) & Co are among companies scheduled to report quarterly earnings before the bell.
With no major economic data due on Friday, focus will now shift to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole economic symposium next week.
Earnings from chip designer Nvidia (NASDAQ: NVDA), which have rallied this year on enthusiasm around artificial intelligence, will also grab the spotlight in the coming days.
At 5:27 a.m. ET, Dow e-minis were down 76 points, or 0.22%, S&P 500 e-minis were down 10.25 points, or 0.23%, and Nasdaq 100 e-minis were down 47 points, or 0.32%.
Shares of Keysight Technologies (NYSE:KEYS) dropped 11.2% on the electronic equipment maker’s downbeat fourth-quarter forecast.
