Futures slip after Fed-driven rally on Wall Street

[May 05, 2022]  (Reuters) - U.S. stock index futures slipped on Thursday, a day after the Federal Reserve's less aggressive tone sparked a rally on Wall Street, with investors awaiting jobs data this week for more clues on the path of interest rates.

Citigroup slipped 0.7% in premarket trading to lead losses among big banks. Megacap companies slid, with Meta Platforms and Tesla Inc down over 1% each.

The benchmark S&P 500 index recorded its biggest one-day percentage gain in nearly two years on Wednesday after the Fed raised its benchmark overnight interest rate by half a percentage point as expected and said it would begin shrinking its $9 trillion asset portfolio next month in an effort to further lower inflation.

Calming investors' anxiety about aggressive policy tightening, Fed Chair Jerome Powell explicitly ruled out raising rates by 75 basis points in a coming meeting.
 

The focus shifts to the U.S. Labor Department's closely watched monthly employment report on Friday for clues on labor market strength and its impact on the monetary policy.

Worries about Fed policy moves, mixed earnings from some big growth companies, the conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, overshadowing a better-than-expected quarterly reporting season.

The tech-heavy Nasdaq has declined 17.1% year-to-date, compared with a 9.8% drop in S&P 500 and a 6.3% fall in the blue-chip Dow.

Of the 368 companies in the S&P 500 that have reported earnings as of Wednesday, 79.9% have topped analyst expectations. The first-quarter earnings is expected to grow 9.7% year-over-year.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. May 4, 2022. REUTERS/Brendan McDermid

At 06:53 a.m. ET, Dow e-minis were down 133 points, or 0.39%, S&P 500 e-minis were down 23.5 points, or 0.55%, and Nasdaq 100 e-minis were down 95.25 points, or 0.7%.

Twitter Inc rose 2.6% as Elon Musk secured $7.14 billion in funding from a group of investors that includes Oracle Corp co-founder Larry Ellison to fund his $44 billion takeover of the social-media company.

EBay Inc slid 7.4% after the e-commerce retailer projected downbeat second-quarter revenue as growth slows in the sector after two years of rapid expansion during the pandemic.

Albemarle Corp jumped 14.1% as the lithium producer raised its full-year forecasts on robust demand and higher prices for the metal used in electric-vehicle batteries.

U.S.-listed shares of China's JD.com, NetEase Inc, Pinduoduo and Bilibili Inc fell between 2.4% and 3.8% as the U.S. securities regulator added over 80 firms to a list of entities facing possible expulsion from American exchanges amid a long-running U.S.-China audit standoff.

(Reporting by Devik Jain in Bengaluru)

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