LDN - Business

Futures fall as investors assess mixed earnings, Fed rate path

[April 21, 2023] By Sruthi Shankar and Ankika Biswas

(Reuters) -U.S. stock index futures fell on Friday as investors digested a mixed bag of earnings reports, while awaiting more data for clues on the Federal Reserve's interest rate path and the state of the economy.

Wall Street closed lower on Thursday after disappointing quarterly reports from Tesla Inc and AT&T Inc worsened an already downbeat mood in markets following weak economic data that fueled concerns of a U.S. recession.

Among major earnings, consumer company Procter & Gamble Co gained 1% in premarket trading after raising full-year sales forecast on higher pricing.

HCA Healthcare Inc advanced 7% after raising 2023 results forecast on improving level of staffing that has allowed the hospital operator to conduct more surgeries. Copper miner Freeport-McMoran will report earnings later in the day.

Investors are focused on S&P Global's flash purchasing managers' indexes (PMI) at 9:45 a.m. ET (1345 GMT) that are expected to show the momentum in U.S. business activity cooled further in April.

A slate of Fed speakers this week voiced support for another 25-basis-point rate hike by the U.S. central bank when it meets next week. Traders have priced in an 82% chance of such a move, with many expecting them to hold before cutting rates by the end of 2023.

Fed Board Governor Lisa Cook is set to take the stage on Friday before the central bank's policymakers enter a blackout period until the next policy meeting in May.

U.S. stocks indexes have been rangebound this week with investors seeking clues on how far the Fed could hike interest rates, while earnings have signaled resilience in big banks though most regional lenders reported deposit outflows in the wake of a banking crisis last month.

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A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 17, 2023. REUTERS/Andrew Kelly

U.S. Treasury yields slipped, extending Thursday's declines after data showed the number of Americans filing new claims for unemployment benefits increased moderately last week and a measure of future economic activity plunged to the lowest level in nearly 2-1/2 years in March.

At 7:08 a.m. ET, Dow e-minis were down 43 points, or 0.13%, S&P 500 e-minis were down 9.75 points, or 0.23%, and Nasdaq 100 e-minis were down 56.5 points, or 0.43%.

Tesla Inc edged up 0.9% after raising the U.S. prices for its Model S and X premium electric vehicles, although they are still 20% lower from the start of the year after a slew of price cuts aimed at stoking demand.

Cathie Wood's asset management firm Ark Invest picked up stake in the electric-vehicle maker following the stock's 9.7% slide on Thursday as the company's first-quarter gross margins missed estimates on aggressive price cuts in January.

U.S.-listed shares of Chilean lithium miner SQM tumbled 6.4% after Chile's president, Gabriel Boric, said he would nationalize the country's lithium industry, transferring control of its vast operations from industry giants to a separate state-owned company.

Albemarle Corp dropped 3.8%, while Lithium Americas Corp slipped 1.9%.

(Reporting by Sruthi Shankar and Ankika Biswas in BengaluruEditing by Vinay Dwivedi)

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