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Powell on Thursday backed moving more quickly to combat
inflation and said a 50 basis point (bps) increase would be "on
the table" when the Fed meets in May, resulting in the
tech-heavy Nasdaq ending the session down more than 2%.
In premarket trading, megacap growth stocks Apple Inc and
Microsoft Corp edged lower, while Alphabet Inc and Amazon.com
Inc were muted, as investors fretted about impact of the
higher-rate environment.
Interest-rate sensitive banks traded mixed. Yields on five-year
notes climbed past 3%, while the two-year yields touched a new
high since late 2018. [US/]
Traders now see a 88.2% chance of 50 bps hike at Fed's May
meeting and a 11.8% probability of a 75 bps increase. [IRPR]
The prospect of a more hawkish Fed has led to a rocky start to
the year for equities, and in particular tech and growth shares
whose valuations are more vulnerable to higher bond yields.
The Nasdaq has fallen 15.9% so far this year compared with a
7.8% decline in the benchmark S&P 500.
At 6:41 a.m. ET, Dow e-minis were down 124 points, or 0.36%, S&P
500 e-minis were down 16.25 points, or 0.37%, and Nasdaq 100
e-minis were down 52 points, or 0.38%.
Of the 88 companies in the S&P 500 that have reported earnings
for the first quarter, 80.7% of them have beat market
expectations as of Thursday. Typically, 66% of companies beat
estimates, according to Refinitiv data.
Gap Inc slid 14.3% after the apparel company cut its forecast
for quarterly sales, blaming execution challenges at its Old
Navy brand and "macro-economic dynamics".
Investors will also be awaiting a flash reading on S&P Global
composite PMI data for April after market opens.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Arun
Koyyur)
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