U.S. equity futures slumped lower again Friday, with market volatility gauges holding at nearly fifteen months highs, as investors look to close out another wild week of trading on Wall Street that has pulled the broadest measure of domestic stocks deeper into correction territory.
The Federal Reserve’s hawkish stance on rates and inflation from earlier this week, coupled with a disappointing earnings season and suggestions of slowing economic growth have pulled global stocks lower this week, while added market volatility — much of it linked to equity options trading — has whipsawed the Dow into triple-digit intra-day swings for much of the past week.
Growth concerns are also being played out in the bond market, where the gap between 2-year and 10-year note yields has narrowed to just 62.2 basis points, setting up the prospect of a so-called curve inversion — where 2-year note yields rise past 10-year yields — that suggests a near-term recession.
Stronger-than-expected earnings from tech giant Apple (AAPL) – Get Apple Inc. Report could provide some early respite for the markets heading into the start of trading, but investors will first need to pass through a key reading of December inflation at 8:30 am eastern time as well as December quarter updates from Exxon Mobil (XOM) – Get Exxon Mobil Corporation Report, Chevron (CVX) – Get Chevron Corporation Report and Caterpillar (CAT) – Get Caterpillar Inc. Report.
Amid the pre-market headlines, futures tied to the Dow Jones Industrial Average are indicating a 350 point opening bell decline while those linked to the S&P 500 are priced for a 40 point dip.
Apple and Tesla (TSLA) – Get Tesla Inc Report are giving Nasdaq Composite futures a boost, with the tech-focused benchmark indicating a 110 point opening bell retreat, a move that would take the broadest benchmark of U.S. shares some 10.5% from its all-time high on January 3.
Apple shares, in fact, are up more than 3.2% in pre-market trading as record holiday sales, built off a surge in iPhone demand, offset concerns for global supply chain disruptions and chip shortages and powered the tech giant into a crushing first quarter earnings tally.
On the downside, Robinhood (HOOD) – Get Robinhood Markets, Inc. Class A Report shares plunged lower in pre-market trading after the online trading platform posted a steeper-than-expected fourth quarter loss and said near-term revenues would come in sharply lower than Street forecasts.
Visa (V) – Get Visa Inc. Class A Report shares were up 3.5% after the world’s biggest credit card posted better-than-expected first quarter earnings thanks to a surge in post-pandemic spending and the full return of international travel.
Caterpillar (CAT) – Get Caterpillar Inc. Report, however, fell 2% even as it published stronger-than-expected fourth quarter earnings amid an ongoing rebound in global construction equipment sales and surging commodity prices.