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Rate-sensitive Big Tech and growth companies such as Microsoft
Corp, Apple Inc, Google owner-Alphabet Inc, Meta Platforms,
Tesla Inc and Amazon.com fell between 0.6% and 1.5% in premarket
trading after a sharp rebound on Tuesday.
Yields on the benchmark U.S. 10-year Treasury hovered near 3%.
[US/]
The S&P 500 and the Nasdaq closed more than 2% higher in the
previous session after strong April retail sales eased worries
about slowing economic growth.
Tuesday's rally followed weeks of selling on the U.S. stock
market that last week saw the S&P 500 coming close to confirming
a bear market from its record close on Jan. 3.
Federal Reserve Chair Jerome Powell told the Wall Street Journal
on Tuesday that the U.S central bank will keep "pushing" on rate
hikes until it sees inflation move down in a "clear and
convincing way", not hesitating to move more aggressively if
that does not happen.
Traders are pricing in a 85.3% probability of a 50 basis point
interest rate hike in June.
"It seems that for now he (Powell) is sticking to his guns of 50
bps increases for the next couple of meetings ... he is not
totally dismissing the chance for 75 bps hikes in a few months
if inflation does not come down," Charalambos Pissouros, head of
research at JFD Group, said.
"So with that in mind, we cannot confidently say that the latest
recovery in equities is the start of a bullish reversal ... we
will consider the current recovery as a corrective move."
Uncertainty about Fed policy moves has weighed on the markets
recently, that is already reeling from concerns about a global
economic slowdown due to the conflict in Ukraine, soaring
inflation, prolonged supply chain snarls and pandemic-related
lockdowns in China.
The S&P 500 is down 14.2% so far in 2022 and the Nasdaq has
fallen more than 23%, hit by growth stocks.
At 7:04 a.m. ET, Dow e-minis were down 112 points, or 0.34%, S&P
500 e-minis were down 19.5 points, or 0.48%, and Nasdaq 100
e-minis were down 86.25 points, or 0.69%.
Among other stocks, Target Corp fell 21.7% after the retailer's
first-quarter profit halved and it warned of a bigger margin hit
due to rising fuel and freight costs.
Lowe's Cos Inc slipped 2.5% after reporting a
bigger-than-expected drop in same-store sales, as demand eased
for its home-improvement tools and building materials from
pandemic highs.
(Reporting by Amruta Khandekar and Devik Jain in Bengaluru;
Editing by Shounak Dasgupta)
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