Stocks are falling, technology stocks are lagging behind the Fed in the spotlight

U.S. stocks traded lower on Friday, with investors continuing to speculate on the next steps of the Federal Reserve.

The S&P 500, Dow and Nasdaq indexes rolled back after rising on Thursday. As of Thursday’s close, the S&P 500 was on track for a weekly loss that would have halted the three-week winning streak if the level remained until Friday’s close.

Fresh comments from Fed officials remained in the spotlight as another group of speakers offered a mixed set of comments regarding the central bank’s future path. Fed Chairman St. Louis James Bullard said Thursday that he wants the Fed to reach 3% to 3.25% of the rate on Fed funds in the second half of this year, implying a more aggressive increase in interest rates soon. term. Bullard was the only one to disagree at the March Fed meeting, which called for a larger interest rate hike of 50 basis points versus the 25-point hike that eventually occurred.

While Bullard was now a long-term hawk seeking greater measures from the Fed to curb inflation, earlier remarks this week suggested that other central bankers were also warming to the idea of ​​tightening policies. Fed Governor Lael Brainard said the Federal Open Market Committee (FOMC) was “ready to take more decisive action” if inflation remains high and justifies such steps. And in the minutes of the Fed meeting, released on Wednesday afternoon, the central bank said that “many participants … would prefer to raise rates by 50 basis points,” and suggested that the Fed is preparing to announce the beginning of its balance sheet. sheet runoff process.

However, other Fed officials have proposed a more balanced approach to raising rates. Speaking on Thursday, Atlanta Fed President Rafael Bostik said it would be “appropriate” to move the benchmark interest rate “closer to a neutral position”, offering a somewhat less hasty series of interest rate hikes. Meanwhile, Chicago Fed President Charles Evans suggested that the Fed would be able to “go neutral, look around and find that we are not necessarily so far from where we need to go.”

Taken together, the convergence of comments at least temporarily helped stocks halt the last bout of volatility earlier this week, and kept Treasury bond yields more stable after a sharp rise. The benchmark 10-year return was about 2.6%, the highest level since 2019.

“The market actually had to digest a lot of information – a lot of hawk information from the Fed over the last couple of days. We were on sale. And I think [Thursday] we’ve finally had a chance to take a break and realize that there are some positive things happening in the stock markets in particular, ”said Kevin Nicholson, director of global fixed income at RiverFront Investment Group. said Yahoo Finance Live on Thursday. “We still expect the revenue season to be better than expected … We also believe you have support with a strong job market.” From that perspective, the economy is in great shape. “

“We expect stock markets to recover,” he added. “And we’re actually looking to get them back to their 4,800 highs in a few months, especially when they’re getting more clarity from the Fed. As we all know, stock markets don’t like uncertainty.”

10:00 ET: Peloton trades stocks volatile after Morgan Stanley predicts fitness subscribers could exceed 3 million

Shares of Peloton (PTON) rose briefly 2% on Friday morning after Morgan Stanley analysts said they expect the affiliated fitness company to exceed subscriber growth recommendations this quarter. However, the stock soon wiped out earnings, and traded lower by about 1% in the middle of the morning.

Morgan Stanley expects the number of subscribers in the company’s fitness connection to exceed 3 million in the third fiscal quarter. Earlier this year, Peloton said it expects 2.93 million subscribers in the third quarter before they grow to 3 million at the end of the fiscal year. Bank analysts cited website activity data for the forecast, which suggested Peloton added more new users than previously thought.

Morgan Stanley rates Peloton as equal weight with a target price of $ 32 per share.

9:31 a.m. ET: Shares open mixed

Here’s where the markets traded on Friday morning:

  • S&P 500 (^ GSPC): -6.65 (-0.15%) to 4,493.56

  • Dow (^ DJI): +7.98 (+ 0.02%) to 34,591.55

  • Nasdaq (^ IXIK): -63.13 (-0.45%) to 13,837.07

  • Raw (CL = F): + $ 0.26 (+ 0.27%) to $ 96.29 per barrel

  • Gold (GC = F): +2.50 dollars (+ 0.13%) to 1940.30 dollars per ounce

  • 10-year treasury (^ TNX): +5.4 bp up to 2.708%

7:40 a.m. ET Friday: stock futures rise, adding to Thursday’s earnings

Here’s where the markets traded on Friday morning:

  • S&P 500 futures (ES = F): +14 points (+ 0.31%) to 4,510.25

  • Dow Futures (YM = F): +130 points (+ 0.38%) to 34,620.00

  • Nasdaq Futures (NQ = F): +44.25 points (+ 0.3%) to 14,580.25

  • Raw (CL = F): +0.03 dollars (+ 0.03%) to 96.06 dollars per barrel

  • Gold (GC = F): $ -3.30 (-0.17%) to $ 1,934.50 per ounce

  • 10-year treasury (^ TNX): +1.6 bps to 2.67%

6:14 pm ET: Thursday: stock futures drift sideways

Here’s where the main futures traded on the index on Thursday night, when the night session began:

  • S&P 500 futures (ES = F): +2.25 points (+ 0.05%) to 4,498.50

  • Dow Futures (YM = F): +12 points (+ 0.03%) to 34,502.00

  • Nasdaq Futures (NQ = F): +13 points (+ 0.09%) to 14,549.00

NEW YORK, NEW YORK – APRIL 01: Traders work on the site of the New York Stock Exchange during trading on the afternoon of April 1, 2022 in New York. U.S. stocks closed higher on the first day of trading in the second quarter of 2022 after the Department of Labor released a job report that showed growth well above the pandemic trend. (Photo by Michael M. Santiago / Getty Images)

Emily McCormick is a Yahoo Finance reporter. Follow her on Twitter.

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