Futures slide on rate hike jitters, Fed minutes awaited
2022.04.06 14:31
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2022. REUTERS/Brendan McDermid
(Reuters) – U.S. stock index futures fell on Wednesday, signaling a second day of selling on Wall Street as investors feared aggressive moves by the Federal Reserve to tackle inflation, with eyes on minutes from the central bank’s March meeting.
Fed Governor Lael Brainard said on Tuesday she expected a combination of interest rate rises and a rapid balance sheet runoff, spooking investors and dragging the tech-heavy Nasdaq down more than 2%.
Megacap growth and technology stocks, whose valuations stand to be pressured by higher bond yields, fell more than 1% in premarket trading. The benchmark 10-year yield hit a three-year high of 2.633%. [US/]
Tesla (NASDAQ:TSLA) Inc, Meta Platforms Inc, Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) Inc and Microsoft Corp (NASDAQ:MSFT) fell between 0.9% and 1.9%.
The Federal Open Market Committee’s minutes from its March meeting, set to be released at 1800 GMT, could indicate just how fast and how far policymakers will proceed in trimming several trillion dollars from the stash of assets purchased to stabilize financial markets through the pandemic.
Meanwhile, traders now see 83.1% odds of a 50 basis points rate hike at the Fed’s meeting in May. [IRPR]
The CBOE Volatility index, widely known as Wall Street’s fear gauge, rose to 22.8 points, highest since March 28.
At 06:37 a.m. ET, Dow e-minis were down 184 points, or 0.53%, S&P 500 e-minis were down 31.25 points, or 0.69%, and Nasdaq 100 e-minis were down 156 points, or 1.05%.
Investors also awaited details of the latest package of coordinated sanctions by the West being readied against Russia in response to civilian killings in Ukraine.
JetBlue Airways (NASDAQ:JBLU) Corp fell 3.7% after the carrier said on Tuesday it made an unsolicited $3.6 billion bid for Spirit Airlines (NYSE:SAVE) Inc, potentially snarling merger plans between the ultra-low-cost carrier and Frontier Group Holdings Inc. Frontier Group and Spirit Airlines fell 3.9% and 1.2%, respectively.
