US stocks fall as earnings slump and risk-off pivot intensifies ahead of rate hikes
US stocks slipped Friday as investors continue to fret over a hawkish Fed and disappointing earnings.
Netflix shares tumbled 20% after weak subscriber growth outlook.
Cryptocurrencies and oil prices slipped, while gold slightly rose.
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US stocks continued their decline on Friday as investors continue to worry about a hawkish Federal Reserve, interest rate hikes, rising inflation, and disappointing earnings, particularly from mega-cap technology firms.
The tech-heavy Nasdaq Composite entered correction territory in the previous session and remained in the red Friday morning. The Dow Jones Industrial Average, which whipsawed Thursday by closing more than 150 points lower after initially climbing over 400 points, is also trading lower, on track for its sixth straight loss.
Here's where US indexes stood shortly after the 9:30 a.m. ET open on Friday:
S&P 500: 4,464.13, down 0.41%
Dow Jones Industrial Average: 34,655.83, down 0.17% (59.56 points)
Nasdaq Composite: 14,084.21, down 0.49%
Netflix shares slipped 20% after disappointing subscriber outlook. Year-to-date through Thursday, Netflix had lost nearly 16% alongside a broader selloff in tech stocks, which have largely benefitted from a low-interest-rate environment during the pandemic.
US equities as a whole have been roiled in early 2022 by expectations that the Fed will repeatedly hike rates and start reducing its balance sheet, bringing an end to the central bank's massive support of the US economy through the pandemic.
"The Fed will announce the last round of asset purchases at the January FOMC meeting, which is well anticipated, Ethan S. Harris, Bank of America's global economist, said in a note Friday, referring to the Federal Open Market Committee meeting from January 25-26. "We believe Chair Powell could continue to pivot hawkishly during the press conference."
On wages, he sees the Employment Cost Index likely up 1.2% quarter over quarter in the fourth quarter, marking a 4.2% year-over-year rise. On inflation, he expects the core personal consumption expenditure price index to rise 0.4% month over month, posting a 4.6% year-over-year rate.
The 10-year Treasury yield edged lower to 1.765% from Thursday's 1.833%. Bond yields move inversely to prices.
In cryptocurrencies, prices have fallen sharply as the assets tracked Wall Street's rout in tech stocks.
Bitcoin plunged as much as 10% to a six-month low below $38,000 and ether dropped to under $3,000 as a broad sell-off intensified Friday.
"The decline is not a breakdown, but it brings bitcoin out of the consolidation phase that has characterized the chart for about three weeks in a bearish shift in short-term momentum," Katie Stockton, founder of Fairlead Strategies, said in a note Friday.
Oil slightly edged lower though prices are still near their highest levels since late 2014.
West Texas Intermediate crude oil fell 0.74% to $84.92 per barrel. Brent crude, oil's international benchmark, dropped as much as 0.84% to $87.64per barrel.
Morgan Stanley on Friday raised its Brent crude oil forecast to $100 per barrel by the third quarter of 2020, up from $90.
Gold rose 0.13% to $1,841.48 per ounce.
Read the original article on Business Insider
