Dow down 300 points, S&P 500 negative for week as hawkish Fed talk lifts Treasury yields

By Barbara Kollmeyer and William Watts

U.S. stocks lost ground early Friday, as bond yields remained elevated and investors continued to weigh up hawkish comments by Federal Reserve Chairman Jerome Powell.

How are stocks trading?

On Thursday, the Dow shed 368.03 points, or 1.1%, reversing a gain of as much as 331.43 points in intraday trading. The more-than 700-point intraday swing was its biggest since March 8, according to Dow Jones Market Data. The S&P 500 fell 1.5%, while the Nasdaq Composite slumped 2.1%.

What’s driving the market?

The S&P 500 index was set to end the week barely higher, with the Dow industrials looking at a gain of nearly 1%, while the Nasdaq was poised for a fall of more than 1%, which would mark its third-straight weekly loss.

Investors were bracing for follow-up from Thursday’s selloff that intensified into the afternoon after the Fed’s Powell added his support for moving faster on raising interest rates to cool inflation, measures that would include a possible 50 basis point interest rate hike in May.

The benchmark 10-year Treasury yield was largely steady at 2.914%, after climbing about 8.1 basis points to 2.917% on Thursday, the highest since Dec. 4, 2018.

Read: How to invest as inflation, higher interest rates and war roil markets

And some are warning that the Nasdaq Composite is looking particularly vulnerable. The week has delivered some big earnings news for the technology sector, with investors cheering Thursday’s results from Tesla(TSLA), on the heels of deeply disappointing Netflix (NFLX) results.

“The technical situation looks suddenly far more bearish today [Friday] for equities after yesterday’s powerful selloff, which took the Nasdaq-100 below the prior pivot low, possibly opening up for a run into the ultimate pivot low just below 13,000 from early March,” said strategists at Saxo Bank in a note.

“The broader S&P 500 index has yet to capitulate below recent lows but did see a dramatic rejection of the attempt to trade above the 200-day moving average yesterday,” they said.

Next week will mark another big week for earnings, with 558 companies reporting, Saxo noted. “It is the big test of companies’ ability to pass on costs to their customers,” they said.

The big names on their list to watch? Microsoft Corp. (MSFT), Alphabet Inc. (GOOGL), UPS Inc. (UPS), Meta Platforms Inc. (FB), Qualcomm Inc. (QCOM), Boeing Co. (BA), PayPal Holdings Inc. (PYPL), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Mastercard Inc. , Intel Corp.(INTC), Caterpillar Inc. (CAT), Exxon Mobil Corp. (XOM), and Chevron Corp. (CVX) .

Oil prices were also under pressure, with U.S. crude down 1.4% to $102.57 a barrel, and international benchmark Brent crude off 1% to $106.61 a barrel.

-Barbara Kollmeyer

What companies are in focus?

How are other assets trading?

 

(END) Dow Jones Newswires

04-22-22 0946ET

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