- US stock markets look set to mark another day of losses Friday after a brutal tech sell-off.
- Investors are anxiously awaiting the Fed’s policy meeting next week for details on its plan to cool inflation.
- Oil prices slid more than 1%, coming under considerable pressure on more gloomy market sentiment.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
US stock futures wavered on Friday after the tech-heavy Nasdaq entered correction territory, while the Federal Reserve’s policy meeting next week continues to weigh on investor sentiment.
Nasdaq futures fell 0.4% in premarket trading after tech stocks came under renewed pressure. Netflix tumbled 20% on reporting poor fourth-quarter earnings and missing subscriber estimates.
Weak subscriber growth dragged down other
“Investors with excess exposure to tech can consider taking some profits on broad gains over the past year, and reallocating into sectors and assets that will benefit from cyclical growth,” UBS strategists wrote in a note Friday.
Meanwhile, Peleton stock was recovering somewhat, up 8% in premarket trading after plunging 23% Thursday on a report that it’s temporarily halting production of its bike and treadmill due to slowing demand.
The S&P 500 is on track for a third consecutive weekly decline for the first time since September 2020, on niggling concerns over the Fed’s tightening of policy to calm soaring inflation.
Also weighing on market sentiment were comments by Treasury Secretary Janet Yellen, who said inflation has risen more than she and other economists expected. Still, the former Fed chief said she’s confident the central bank and the Biden administration will take steps to bring down price pressures over 2022.
Legendary investor Jeremy Grantham, who predicted the last three market bubbles, on Thursday called for a 50% crash for the S&P 500 after the fourth “superbubble” bursts.
In Asia, regional indices traded lower in the wake of US losses and after China cut its benchmark mortgage rates Thursday in an effort to push down borrowing costs.
Oil prices traded lower, but are still near their highest levels since late 2014. Demand in December held up better than feared despite the spread of the Omicron coronavirus variant, and tensions in Eastern Europe and the Middle East are supporting prices due to fears of new supply disruptions, according to UBS.
“The price slide was triggered by sentiment becoming generally more gloomy, as also reflected in noticeably falling stock markets,” said Commerzbank’s Carsten Fritsch.
Bitcoin fell 6% to $39,133, alongside broader cryptocurrency losses, as risk aversion spread across financial markets. The downturn followed Russia calling for a sweeping ban on cryptocurrency activity.