Stock Futures – US stocks tank on rising interest rate anxiety
4:05pm: US equities fall hard
US stocks tanked as the Dow Jones Industrial Average posting its worst weekly loss since October.
Investors and traders got spooked that the Federal Reserve could start raising rates sooner than expected.
On the day, the Dow fell 533 points, or 1.58%, to 33,290. The S&P 500 declined 1.31% to 4,166 and the tech-heavy Nasdaq dropped by 0.92% to 14,030.
12.20pm: US stocks see red at lunch
US indices were seeing red at lunch as investors decided to shun equities on the last day of a busy week.
Today is dubbed ‘Quadruple witching’ day – something, which happens on the third Friday of the month of every quarter, in March, June, September, and December.
It refers to the simultaneous expiry of single-stock options, single-stock futures, and stock-index options and stock-futures.
“Heavy losses in Europe and in the US are being influenced by options expiry but the second half of this week has taken on a distinctly ‘risk off’ feel, as investors seek to reassess a host of assumptions now that the Fed has changed its own working and outlook for the year for monetary policy,” said Chris Beauchamp, chief market analyst at trading group IG.
On Wednesday this week, the US central bank took many by surprise when it hinted that a rise in interest rates to curb inflation may come sooner than expected.
In London, FTSE 100 earlier had closed down over 135 points at 7,017.
9.50am: Proactive North America headlines:
Naturally Splendid Enterprises Ltd () (OTCPINK:NSPDF) (FRA:50N) buys ‘state-of-the-art’ packaging line and issues shares to cancel debt
Esports Entertainment Group Inc () launches InVIE esports tournament series in South America
Ready Set Gold Corp () (OTCPINK:RDYFF) (FRA:0MZ) says will advance Northshore project with pending private placement of convertible debentures
Versus Systems Inc () () powers in-stadium engagement for Los Angeles Football Club as live events roar back
Plurilock Security Inc () (OTCQB:PLCKF) beats competition to win new order from California state taxation agency
Inc () (FRA:PFX1) announces new Therma-Fix Gen3 vacuum thermal desorption system to treat problematic waste streams
() (OTCMKTS:NHAWF) (FRA:VTJ1) starts till sampling program to identify kimberlite source at newly-staked CSI diamond project in Nunavut
9.41am: Wall Street stocks down
The main indices on Wall Street tumbled at the opening bell on Friday as investors were spooked by talk of interest rate hikes and worries about inflation.
While the market was broadly lower, an early winner was software firm Adobe Inc (), which jumped 1.8% to US$561.34 shortly after the opening bell following strong quarterly numbers reported after the close on Thursday.
7:45am: Wall Street set for mixed start
Wall Street indices are set for a subdued open on Friday morning, with the Dow Jones industrial Average called 45 points lower at 33,649 and the S&P 500 4 points lower at 4,207.
The Nasdaq may offer some respite as futures are pointing at a green open, up 19 points to 14,176.
Declines in the former two indices highlight the ongoing concerns that rising inflation could soon curtail the expansive monetary policy mix around the world.
“Despite promises that central banks will remain accommodative, we are evidently moving towards a phase which will become increasingly dominated by attempting to quantify just how long we have left until the pendulum starts to swing back towards monetary tightening,” analysts at IG said.
“With Norway’s central bank laying out plans to start raising rates in September, we are evidently seeing growing confidence that the worst is behind us and thus normalisation will be required to avoid overheating.”
Thursday came with another rally for the US dollar overnight, with the index rising through its 200-DMA at 91.50 on its way to a close at 91.90, a 0.55% gain for the day.
“A less-dovish FOMC, foreign inflows into the US bond market, and a speculative market that was well short of US DOllars into the FOMC, should see the US Dollar rally continue into next week,” analysts at OANDA said.
Three things to watch for on Friday:
- Firms reporting earnings at the end of the week include shipping firm Ltd () and Continental Energy Corp (OTCMKTS:CPPXF)
- Shares in software firm Adobe Inc () will be in focus after the company reported strong second quarter earnings after the closing bell on Thursday
- The macro diary is a little bare for Friday, although some oil rig data may interest some in the market