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Stock futures rise as indexes aim to pare weekly losses

Stock futures rise as indexes aim to pare weekly losses

U.S. stocks gained Friday, shaking off some losses from earlier this week after concerns over persistent inflation and the resilience of the U.S. economy stirred up further volatility in recent sessions.

The S&P 500 rose by more than 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} intraday on Friday while the Nasdaq jumped by nearly 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Dow added more than 350 points. The sharp move higher came after Federal Reserve Chair Jerome Powell reaffirmed in an interview with Marketplace public radio on Thursday that two more 50 basis point rate hikes were on the table for the next two Fed meetings, and that officials were not “actively considering” a more aggressive 75 basis point hike. His comments echoed what other Fed officials also said this week.

Just a day earlier, the S&P 500 had closed within striking distance of a bear market, typically defined as a close of at least 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent record high. The index has declined by just over 18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its Jan. 3 record high through Thursday’s close, and it paced toward a weekly drop of 4.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} if levels hold through the end of Friday’s session.

The Dow Jones Industrial Average and Nasdaq Composite each also headed for weekly losses of 3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 6.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively, based on Thursday’s closing prices. Treasury yields have spiked and then pared gains back this week, with the benchmark 10-year Treasury yield hovering around 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Friday morning. Bitcoin prices recovered to trade above $30,000 after setting the lowest level since Dec. 2020, as a cratering in prices of Luna further reverberated across the broader cryptocurrency market.

The market gyrations this week coincided with two major inflation reports that came in hotter-than-expected. Thursday’s Producer Price Index showed an 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year rise in wholesale prices last month, with this rate moderating only slightly from March’s all-time high rate of 11.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. And the Consumer Price Index released earlier this week showed a still-elevated 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in prices paid by consumers last month.

“Inflation has certainly become not only topical, but a real issue for the broader market, as the Fed has also increased its outlook for the number of [interest rate] hikes needed,” Sonali Pier, managing director and portfolio manager at Pimco, told Yahoo Finance Live on Thursday. “In terms of the effect of inflation, it’s really at this point, we’re going to see if the Fed raising rates, unwinding some of the balance sheet, can take off some of that inflation froth. Because it’s quite high, and it’s starting to impact companies — from their ability to push through from a pricing power perspective, as well as consumers, whether that’s at the gas pump or as a result of food increases and the like.”

Other strategists agreed that the Fed’s response to inflation — and how well the economy holds up as the Fed tightens financial conditions to address inflation — will be the key factor to watch going forward for the markets.

“We’re in an environment right now where inflation is high. The labor market is very tight. The Fed wants to bring inflation down. They want to sort of cool the overheating in the labor market, which means their bias is to tighten financial conditions and try and slow growth,” Jason Draho, UBS Head of Asset Allocation, said on Thursday. “In that environment, it’s not great for any sort of financial assets.”

“[Once] we get some sort of real break on inflation that people become much more comfortable that it’s moderating, and moderating [to] a sustainable level that the Fed could be more comfortable, and they don’t have to hike more aggressively … I think that’s the key catalyst,” Draho said. “Unfortunately, that might take a few more months before the data starts to clearly show inflation is definitely below its peak, and the Fed could achieve its target two years out.”

“So I think for the time being, it’s definitely a choppy market,” he added.

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10:15 a.m. ET: Consumer sentiment drops to lowest level since 2011: University of Michigan

Consumer sentiment fell to a more than decade low in early May, according to the University of Michigan, as concerns around inflation persisted.

The University of Michigan’s closely watched Surveys of Consumers index dropped to 59.1 in the preliminary May report, declining sharply from April’s reading of 65.2. The latest reading marked the lowest since 2011.

The sentiment declines “were broad based — for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation—continuing the general downward trend in sentiment over the past year,” Joanne Hsu, director of the Surveys of Consumers, said in a press statement. “Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of consumers attributing their negative assessment to inflation.”

Consumers’ inflation expectations remained elevated in May, with the survey showing one-year inflation expectations were unchanged at 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. However, some strategists suggested the drop in risk assets over the past several weeks played an even larger role in the drop in the headline index.

“I would argue that the drop was largely a function of the plunge in stock prices. We know U. Mich is more sensitive to markets,” Neil Dutta, head of economics at Renaissance Macro Research, wrote in an email Friday morning. “Inflation is an issue sure but the inflation expectations series were unchanged.”

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9:33 a.m. ET: Stocks open higher

Here were the main moves in markets as of 9:33 a.m. ET:

  • S&P 500 (^GSPC): +43.33 (+1.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.41

  • Dow (^DJI): +241.55 (+0.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,971.85

  • Nasdaq (^IXIC): +189.64 (+1.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,560.61

  • Crude (CL=F): +$3.05 (+2.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $109.18 a barrel

  • Gold (GC=F): -$24.60 (-1.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): +9.8 bps to yield 2.9150{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

7:54 a.m. ET: Tesla shares jump in early trading after Musk says Twitter deal on pause

Shares of Tesla (TSLA) jumped by more than 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} ahead of the opening bell Friday morning after CEO Elon Musk said his $44 billion plan to purchase Twitter (TWTR) was temporarily paused, pending more details over how much of Twitter’s use base comprises bot accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of users,” Musk said in a Twitter post early Friday. He linked to a Reuters story suggesting Twitter filings showed fake or spam accounts made up fewer than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the company’s monetizable daily active users.

In announcing his deal to buy Twitter over the past month, Musk has suggested targeting bot accounts and authenticating users was one of his priorities for the company post-deal.

Twitter shares sank 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading to hover around $40 apiece.

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7:45 a.m. ET Friday: Stock futures jump after Powell reaffirms 75 basis point rate hikes not currently under discussion

Here’s where markets were trading ahead of the opening bell Friday morning:

  • S&P 500 futures (ES=F): +46 points (+1.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.25

  • Dow futures (YM=F): +262.00 points (+0.83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,914.00

  • Nasdaq futures (NQ=F): +206.75 points (+1.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,154.00

  • Crude (CL=F): +$1.79 (+1.69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $107.92 a barrel

  • Gold (GC=F): -$7.90 (-0.43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,816.70 per ounce

  • 10-year Treasury (^TNX): +9.8 bps to yield 2.915{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

6:10 p.m. ET Thursday: Stocks open lower

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): -10 points (-0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,917.25

  • Dow futures (YM=F): -73 points (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,579.00

  • Nasdaq futures (NQ=F): -41 points (-0.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,906.25

NEW YORK, NEW YORK - MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

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

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Stock futures sink as volatility grips markets

Stock futures sink as volatility grips markets

U.S. stocks fell Monday morning to extend last week’s losses, as investors looked ahead to more data this week on inflation and earnings to gauge the strength of the economy and corporate profits as the Federal Reserve continues to tighten monetary policy.

The S&P 500 dropped nearly 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. This added to losses after the index posted a fifth straight weekly decline last week. The Nasdaq sank by another 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and the Dow fell by more than 400 points.

Investors this week are awaiting more data on the state of inflation in the U.S., which will help show how much more aggressive the Fed many need to be in order to rein in elevated price pressures. Wednesday’s Consumer Price Index (CPI) and Thursday’s Producer Price Index (PPI) for April are expected to show a deceleration in price increases, suggesting March may have been the peak in the rate of price increases across the economy.

This data will come in the wake of the Fed’s latest monetary policy decision and press conference from Federal Reserve Chair Jerome Powell, which was met with heightened volatility among risk assets. Stocks spiked and then slid, and Treasury yields marched higher following the monetary policy decision, as investors appraised whether the tools at the central bank’s disposal will be sufficient to keep inflation from becoming further entrenched while preserving economic growth.

“We knew the Fed was going to hike rates 50 basis points — it was the most telegraphed hike in the history of mankind. But the markets sold off into it. And then they finally did it and it’s like, okay, it’s done,” Eric Diton, The Wealth Alliance president and managing director, told Yahoo Finance Live on Friday. “And so you got a lot of short covering and you got a big rally.”

“That was not the real deal. The real deal was what followed … and that is that there’s a tremendous amount of uncertainty out there,” he added. “Yes, we know the Fed’s going to hike. How many times they’re going to hike? There’s a huge disparity between where rates are and where the inflation rate is. Is the Fed going to have to get up to 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} or 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or is inflation going to come down, they’re going to meet in the middle? That uncertainty is one of the big factors that’s driving this market to continue to come down.”

Other concerns to economic growth have also abounded recently, as Russia’s war in Ukraine and China’s renewed virus-related lockdowns stoked concerns over further persistent supply chain disruptions. Many strategists agreed that the next moves in the market would be driven by Fed’s response to inflation amid this backdrop.

“Looking forward, the path of the market will depend on the Fed’s battle against inflation,” David Kostin, Goldman Sachs chief U.S. equity strategist, wrote in a note. “In our base case, the negative impact on valuations from higher real rates will be partially offset by a narrowing yield gap. If recession risk rises, interest rates may fall but not by enough to prevent equity multiple sand share prices from falling further.”

Meanwhile, earnings season will continue this week with major names including Disney (DIS), Peloton (PTON) and Rivian Automotive (RIVN) reporting results. So far, 85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of S&P 500 components have reported actual results, according to FactSet. And as of Friday, the expected earnings growth rate for the S&P 500 was 9.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, which, if maintained, would represent the slowest increase for the index since the fourth quarter of 2020 and fall below its average five-year growth rate of 15.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

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9:30 a.m. ET: Stocks open lower, holding overnight losses

Here were the main moves in markets as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): -60.53 (-1.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,062.81

  • Dow (^DJI): -422.40 (-1.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,476.97

  • Nasdaq (^IXIC): -219.38 (-1.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,925.28

  • Crude (CL=F): -$2.17 (-1.98{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $107.60 a barrel

  • Gold (GC=F): -$13.40 (-0.71{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,869.40 per ounce

  • 10-year Treasury (^TNX): -0.3 bps to yield 3.121{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:43 a.m. ET Monday: Stock futures head for a lower open

Here’s where markets were trading Monday morning:

  • S&P 500 futures (ES=F): -85 points (-2.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,034.50

  • Dow futures (YM=F): -555 points (-1.69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,254.00

  • Nasdaq futures (NQ=F): -337 points (-2.65{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,358.75

  • Crude (CL=F): -$2.65 (-2.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $107.12 a barrel

  • Gold (GC=F): -$25.10 (-1.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,857.70 per ounce

  • 10-year Treasury (^TNX): +5.3 bps to yield 3.177{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

NEW YORK, NEW YORK - MAY 06: Traders work on the floor of the New York Stock Exchange (NYSE) on May 06, 2022 in New York City. Following a day that saw a drop of over 1000 points over inflation fears, the Dow Jones Industrial Average was down over 200 points in morning trading. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MAY 06: Traders work on the floor of the New York Stock Exchange (NYSE) on May 06, 2022 in New York City. Following a day that saw a drop of over 1000 points over inflation fears, the Dow Jones Industrial Average was down over 200 points in morning trading. (Photo by Spencer Platt/Getty Images)

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

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Stock futures drop, Treasury yields spike as traders await inflation, earnings data

Stock futures drop, Treasury yields spike as traders await inflation, earnings data

U.S. stocks dipped Monday morning as investors looked ahead to the start of corporate earnings season this week and a bevy of new economic data as the Federal Reserve prepares to accelerate its moves to counter inflation.

The S&P 500 declined 0.61{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and added to last week’s losses. Nasdaq dropped 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as technology stocks came under renewed pressure. Treasury yields climbed, and the benchmark 10-year yield rose above 2.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to reach the highest level since January 2019.

Concerns over inflation, rising commodity prices amid Russia’s war in Ukraine, and the Federal Reserve’s monetary policy path forward remained at the center of investors’ attention. On Tuesday, traders are set to receive the latest Consumer Price Index from the Bureau of Labor Statistics, which is expected to show a staggering 8.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year increase in prices for the biggest leap since 1982. And this comes as Fed officials have increasingly talked of larger-than-average 50 basis-point interest rate hikes this year to help bring down prices. Last week, the Fed’s March meeting minutes also showed the central bank was gearing up to begin rolling off assets from its $9 trillion balance sheet, in a further move removing financial market support and pivoting away from pandemic-era accommodative policies.

“If we think about recent cycles that are comparable, I think about 2018, 2019, the Fed was raising interest rates and running off its balance sheet. That should sound very familiar,” Seth Carpenter, global chief economist for Morgan Stanley, told Yahoo Finance on Friday. “But at the end of 2018, risk markets started to crack and the Fed reversed course really quickly.”

“The key difference now between those two episodes is they are trying to pull inflation down. They’re not trying to keep it from rising,” he added. “And so what that means is they’re trying to slow the U.S. economy. They’re trying to slow growth so much that inflation pressures come down but not so much that they tip us over into recession. And that’s tricky.”

Meanwhile, the start of the latest quarterly corporate earnings season this week will help show how individual companies have navigated inflationary pressures and the specter of slowing economic growth. As of Friday, Wall Street analysts expected S&P 500 earnings to grow 4.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the first quarter over last year, according to FactSet data. If realized, this would mark the slowest rate since the fourth quarter of 2020.

“Guidance and management commentary will be particularly important sources of information this quarter given the earnings uncertainty going forward,” David Kostin, Goldman Sachs chief U.S. equity strategist, wrote in a note Monday. “Consistent with prior quarters, guidance has recently been a key differentiator of stock performance.”

9:30 a.m. ET: Stocks kick off the week lower

Here were the main moves in markets as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): -28.10 (-0.63{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,460.18

  • Dow (^DJI): -100.65 (-0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,620.47

  • Nasdaq (^IXIC): -162.58 (-1.19{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,548.42

  • Crude (CL=F): -$3.74 (-3.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $94.52 a barrel

  • Gold (GC=F): +$20.70 (+1.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,966.30 per ounce

  • 10-year Treasury (^TNX): +4.2 bps to yield 2.7550{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:13 a.m. ET: Twitter shares dip after Musk decides not to join board

Shares of Twitter (TWTR) dropped Monday morning, giving back some of last week’s gains after Tesla CEO Elon Musk opted not to join the board of the social media company after taking a more than 9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} stake.

“Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best,” Twitter CEO Parag Agrawal said in a tweet Monday. “We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.”

“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal added. “The decisions we make and how we execute is in our hands, no one else’s.”

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7:07 a.m. ET Monday: Stock futures head for a lower open

Here’s where markets were trading Monday morning before the opening bell:

  • S&P 500 futures (ES=F): -15 points (-0.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,468.50

  • Dow futures (YM=F): -24 points (-0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,589.00

  • Nasdaq futures (NQ=F): -106.5 points (-0.74{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,220.50

  • Crude (CL=F): -$2.49 (-2.53{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $95.77 a barrel

  • Gold (GC=F): +$16.00 (+0.82{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,961.60 per ounce

  • 10-year Treasury (^TNX): +4.2 bps to yield 2.757{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

NEW YORK, NEW YORK - MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. U.S. stocks opened low after rallying to start the week. (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NEW YORK – MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. U.S. stocks opened low after rallying to start the week. (Photo by Michael M. Santiago/Getty Images)

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

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Stock futures rise before first session of April, jobs report

Stock futures rise before first session of April, jobs report

U.S. stocks were firmly in the green Friday morning as investors looked ahead to a new month of trading and mulled fresh data out of Washington on the state of the labor market.

The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite were each up more than 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after closing out the final trading of March lower to log their worst quarter since the start of 2020.

Investors on Friday are closely monitoring the Labor Department’s monthly jobs report, the most up-to-date snapshot of the strength in hiring across the U.S. economy. U.S. employers added 431,000 jobs in March. Consensus economists were looking for non-farm payrolls to rise by 490,000, according to Bloomberg data, slowing from February’s 678,000 gain but still marking an increase well above pre-pandemic trends. The unemployment rate fell to 3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared to 3.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected — the lowest since February 2020.

Stocks are pushing ahead into April following a volatile month and quarter of trading. The S&P 500 and Dow each dropped more than 4.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the first three months of 2022, closing out their worst quarters — and first quarterly declines — since the first quarter of 2020. The Nasdaq Composite saw the biggest decline, shedding 9.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the past three-month period, as investors rotated away from the technology and growth stocks that had led the market higher last year.

April has historically been a strong month for stocks, and has in fact produced a positive return for the S&P 500 in 15 of the last 16 years, according to LPL Financial’s Ryan Detrick. This time, however, stocks are facing a variety of headwinds that may upend this historically positive seasonality.

Namely, a confluence of concerns around the geopolitical and macroeconomic backdrop contributed to stocks’ worst quarterly performance in two years, and have yet to be fully resolved. Geopolitical risks have been elevated since Russia’s invasion of Ukraine in late February, raising the specter of further snarls to global supply chains that have already been struggling to recover from pandemic-era disruptions. A broad-based spike in prices, and in oil and energy prices especially, has further stoked concerns over the resilience of the consumer — the key driver of the domestic economy — going forward. And the Federal Reserve has begun a protracted process of raising interest rates and tightening financial conditions in a market that had grown accustomed to easy monetary policy since 2020.

“I think investors are very happy that the quarter is over. It was a tough one. Obviously inflation was bad all the way until … the end of the quarter,” Robert Cantwell, Upholdings portfolio manager, told Yahoo Finance Live on Thursday. “And in all likelihood, the next four to six weeks, it’s likely going to continue to be bad news because inflation is persistent, and we’re still comping record growth rates from the first four months of last year.”

“That said, as you get to the second half of next quarter, you could see a scenario where growth rates start accelerating again while inflation tempers, and that has the potential to bring a lot of the bulls back into the market,” he added.

LPL Financial points out that corporate profits may be another component driving the latest rebound in equities. Even in the face of war in Eastern Europe and decades-high inflation, earnings have been holding up, and estimates for S&P 500 Index earnings per share over the next four quarters are higher in March. Although not by much at 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the positive forecast is significant under the circumstances – particularly compared to how other countries have fared. Inflation is driving the more sizable corporate profits as companies enjoy more pricing power as they pass along higher costs to customers.

“On the back of energy independence, the trajectory of U.S. corporate profits has been unaffected by rising energy costs and high inflation so far,” LPL Financial equity strategist Jeffrey Buchbinder noted, adding that conversely, earnings expectations in international markets have fallen in March. “The U.S. profit outlook is the envy of the world right now.”

Elsewhere on the companies front, meme-stock favorite GameStop revealed in a form 8-K filed with the SEC after the bell Thursday that the video-game retailer will seek approval for a stock split at its upcoming shareholder meeting. GME is following a growing list of major companies — Alphabet, Amazon, Tesla — it what could be the “summer of stock splits.” Stock splits are a corporate action taken to improve trading liquidity and make shares more affordable without impacting market capitalization. GME rallied as much as 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in extended trading to a 4-month high of more than $200 per share following the news.

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9:30 a.m. ET: Stocks rise following March jobs report

Here were the main moves in markets at Friday’s open:

  • S&P 500 (^GSPC): +12.54 (+0.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,542.95

  • Dow (^DJI): +74.62 (+0.22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,752.97

  • Nasdaq (^IXIC): +70.78 (+0.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,291.30

  • Crude (CL=F): -$1.01 (-1.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $99.27 a barrel

  • Gold (GC=F): -$23.10 (-1.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,930.90 per ounce

  • 10-year Treasury (^TNX): +9.9 bps to yield 2.4260{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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8:30 a.m. ET: New payrolls come in lower than expected

The U.S. economy notched another sizable payroll gain in March as the labor market extending its strong and speedy recovery to bring employment back to pre-pandemic levels. U.S. employers added 431,000 jobs, lower than the expected 490,000 jobs.

Meanwhile, the unemployment rate dropped a more-than-expected two-tenths of one percent, edging closer to the historic low of 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} seen in February 2020, Bankrate senior economic analyst Mark Hamrick noted, though pointing out that the labor force participation rate remains 1 percentage point below its pre-pandemic level.

The labor force participation ticked up slightly to 62.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after an unexpected jump to 62.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in last month’s data signaled more individuals were returning to look for work or be placed in jobs after being sidelined by COVID-19.

“Beyond the positive March snapshot, the outlook for the next year is for further moderation in jobs creation,” Hamrick said in a note. “Emboldened by exorbitantly high inflation, a hawkish Federal Reserve feels compelled to slam on the brakes. It is hard to imagine how tightening doesn’t ultimately affect the job market.”

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7:14 a.m. ET Thursday: Futures charge higher to kick off April trading

Here were the main moves in futures trading ahead of the open Friday:

  • S&P 500 futures (ES=F): +22.00 points (+0.49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,552.75

  • Dow futures (YM=F): +172.00 points (+0.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,790.00

  • Nasdaq futures (NQ=F): +80.00points (+0.45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,948.75

  • Crude (CL=F): +$0.14 (+0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $100.14 a barrel

  • Gold (GC=F): -$21.90 (-1.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,932.10 per ounce

  • 10-year Treasury (^TNX): 0.00 bps to yield 2.3270{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:12 p.m. ET Thursday: Stock futures open slightly higher

Here’s where the major stock index futures opened Thursday evening:

  • S&P 500 futures (ES=F): +12.5 points (+0.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,543.25

  • Dow futures (YM=F): +100 points (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,718.00

  • Nasdaq futures (NQ=F): +51.75 points (+0.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,920.50

NEW YORK, NEW YORK - MARCH 28: Traders work on the floor of the New York Stock Exchange (NYSE) on March 28, 2022 in New York City. Following a positive week for stocks, the Dow Industrial Average was down over 100 points in morning trading. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 28: Traders work on the floor of the New York Stock Exchange (NYSE) on March 28, 2022 in New York City. Following a positive week for stocks, the Dow Industrial Average was down over 100 points in morning trading. (Photo by Spencer Platt/Getty Images)

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

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Stock futures drift sideways after rally

Stock futures drift sideways after rally

U.S. stocks were mostly higher Friday to build on gains from an up day on Wall Street that saw all three major indexes close sharply higher in the previous session as investors further mulled the path forward for interest rates and a host of new sanctions against Russia.

The S&P 500 inched up 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and the Dow Jones Industrial Average registered a small gain of 60 points. The Nasdaq Composite struggled for direction as it wavered around the flatilne. All three benchmarks closed out Thursday’s higher by more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, placing the indexes on pace for a second straight week of gains if levels hold through Friday’s close.

Developments in Russia’s war in Ukraine remained in focus as President Joe Biden meets with NATO allies in Europe. The U.S. leveled a fresh set of sanctions against Russia and vowed to provide more aid to Ukraine. Biden also said he would support removing Russia from the G20.

Despite the ongoing geopolitical conflict, stocks have remained relatively resilient this week in the face of upbeat economic data and a chorus of commentary from Federal Reserve officials reiterating the central bank’s more hawkish path forward to rein in inflation. In one of the latest datapoints underscoring the ultra-tight labor market, weekly jobless claims set the lowest level since 1969 last week, as companies held onto their existing workers amid widespread labor shortages.

Against this backdrop — and with inflation running at the hottest level in 40 years — central bankers have stepped up talk of tightening monetary policy. Chicago Federal Reserve President Charles Evans said Thursday he was “open” to the notion of a 50 basis-point interest rate hike at a forthcoming Fed meeting if needed. This echoed remarks from other Fed policymakers including San Francisco Fed President Mary Daly, who said earlier this week that if the Fed needed to do 50 basis points, then “50 is what we’ll do.” Fed Chair Jerome Powell earlier this week also signaled a willingness to roll out a larger-than-typical 50-basis point rate hike to address inflation, if deemed necessary.

While prospects of higher interest rates and tighter financial conditions were met with consternation among investors and choppiness in markets earlier this year, traders have begun to digest the prospects of a more hawkish Fed. Still, some strategists cautioned that volatility would likely still be in the cards in the near-term.

“We remain pretty bullish on the market overall but I do think that volatility is here to stay,” Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance Live on Thursday.

“As far as catalysts, there’s a lot of stuff out there. There’s war in Ukraine. The market’s not moving as much on the day-to-day headlines there, but it doesn’t mean that there still couldn’t be a major catalyst from that event, either to the upside or the downside,” Mayfield added. “The Fed — we’ve got a pretty good picture of what they’re planning on doing, but any hints as we get towards May about 50 basis point rate hikes or balance sheet reduction or what that might look like could be a catalyst.”

Others offered a similar take.

“There has been quite a bit of bearish sentiment. We see money managers holding excess cash — more than normal, almost 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on average in cash,” Loreen Gilbert, WealthWise Financial CEO, told Yahoo Finance Live. “I do not think the volatility is over. While we’re happy about some good market bounces on the upside, we’re looking also to see what’s going to happen going forward.”

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9:30 a.m. ET: Stocks open in the green following Thursday’s gains

Here were the main moves in markets at the start of Friday’s session:

  • S&P 500 (^GSPC): +6.95 (+0.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,527.11

  • Dow (^DJI): +72.28 (+0.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,780.22

  • Nasdaq (^IXIC): -7.95 (-0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,183.89

  • Crude (CL=F): -$2.67 (-2.38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $109.67 a barrel

  • Gold (GC=F): -$11.40 (-0.58{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,950.80 per ounce

  • 10-year Treasury (^TNX): +4.4 bps to yield 2.3850{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:35 a.m. ET: Bed Bath & Beyond nears settlement with GameStop ape Ryan Cohen

Bed Bath & Beyond (BBBY) is approaching a settlement with GameStop executive chairman Ryan Cohen, Bloomberg reported on Friday. The deal could see three board members added to Bed Bath & Beyond.

Cohen, founder of the online pet goods retailer Chewy, disclosed a 9.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} stake in Bed Bath & Beyond earlier in March.

In a letter to Bed Bath & Beyond, Cohen said the company’s execution under CEO Mark Tritton has bordered on terrible, compensation is not realistic and the business should be split up (Buy Buy Baby business sold off) and then sold entirely to financial sponsors (private equity).

“We have carefully assessed Bed Bath’s assets, balance sheet, corporate governance, executive compensation, existing strategy and potential alternatives,” Cohen said in a letter obtained by Yahoo Finance. “While we like Bed Bath’s brand and capital allocation policy, we have concerns about leadership’s compensation relative to performance and its strategy for reigniting meaningful growth.”

Representatives for Cohen and Bed Bath & Beyond didn’t immediately reply to Yahoo Finance’s request for comment.

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7:10 a.m. ET: Contracts on main indexes hover near flatline ahead of main trading session

Here were the main moves in markets at in pre-market trading Friday:

  • S&P 500 futures (ES=F): +9.00 points (+0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,521.50

  • Dow futures (YM=F): +58.00 points (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,662.00

  • Nasdaq futures (NQ=F): +31.75 points (+0.22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,795.50

  • Crude (CL=F): -$1.68 (-1.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $110.66 a barrel

  • Gold (GC=F): -$11.20 (-0.57{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,951.00 per ounce

  • 10-year Treasury (^TNX): 0.00 bps to yield 2.3410{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:10 p.m. ET Thursday: Stock futures open little changed

Here’s where the major stock index futures opened Thursday evening:

  • S&P 500 futures (ES=F): +2.25 points (+0.05{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,514.75

  • Dow futures (YM=F): +31 points (+0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,635.00

  • Nasdaq futures (NQ=F): -2.75 points (-0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,761.00

NEW YORK, NEW YORK - MARCH 11: Traders work on the floor of the New York Stock Exchange (NYSE) on March 11, 2022 in New York City. The Dow Jones Industrial Average was up over 200 points in morning trading on the last day of a volatile week for global markets. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 11: Traders work on the floor of the New York Stock Exchange (NYSE) on March 11, 2022 in New York City. The Dow Jones Industrial Average was up over 200 points in morning trading on the last day of a volatile week for global markets. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter. Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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Stock futures fall, but indexes head for weekly gains

Stock futures fall, but indexes head for weekly gains

U.S. stock futures fell Friday morning to give back some gains after a three-day winning streak. However, the major equity indexes still headed for weekly advances as traders took favorably the Federal Reserve’s measured first move on raising interest rates.

Contracts on the S&P 500 declined. The index was on track to post its first weekly gain in three weeks, and its biggest since November 2020, based on closing levels from Thursday. U.S. crude oil prices rose to hold above $104 per barrel, while the 10-year Treasury yield declined to about 2.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Meanwhile, shares of GameStop (GME) — the original darling of last year’s Reddit-fueled investing frenzy — sank after the retailer delivered a wider-than-expected fourth-quarter loss. Other “meme stocks” including AMC Entertainment (AMC) and BlackBerry (BB) also declined in sympathy.

FedEx’s (FDX) stock also dropped after the shipping giant posted quarterly earnings results Thursday afternoon. These reflected lower-than-expected profits, as rising labor and shipping costs more than offset FedEx’s price increases to customers.

For U.S. equity investors broadly, news this week that the Fed opted for a 25 basis point rate hike and charted out a route toward six additional rate hikes later this year helped provide clarity on the future monetary policy path and removed an overhang of uncertainty. The size of the interest rate hike was taken as a carefully considered first move, beginning the process of addressing inflation while avoiding delivering a major shock to markets already weighing Russia’s war in Ukraine.

“They took what I would consider the safe route, which was to do 25 basis points,” Sonal Desai, Franklin Templeton Fixed Income chief investment officer, told Yahoo Finance Live on Thursday. “Absent what we are seeing on the geopolitical stage right now, they probably would have gone for 50. So I definitely would not rule out a faster, more front-loaded pace of rate hikes going forward.”

And later, Fed officials may also upwardly revise its projections for where interest rates will end this year, in the event that inflation does not moderate quickly, Desai added. Based on the Fed’s projections from Wednesday, short-term interest rates would likely end the year around 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

“I could see them going up to 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year — we could expect, by the end of next year, looking at something closer to 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996},” she added. “So I’m looking at what the Fed has done. I think it was what as needed because it may come across as hawkish, but the Fed is enormously behind the curve at this point.”

Technology stocks in particular got a boost following the Fed’s decision, with some of the most badly beaten down growth names recovering some year-to-date losses. While some strategists suggested the bottom may have been put in for most tech stocks, others were less certain.

“We did get the hawkish statements out of the Fed [Wednesday], and even though they’re going to be stiff headwinds for tech stocks and other aggressive growth companies, the data is now known. And when it’s known, it’s absorbed in the market,” Paul Meeks, Independent Wealth Solutions Management portfolio manager, told Yahoo Finance. “The thing that I still worry about, and it keeps me away from go all-in in tech, is what’s going on in Eastern Europe, because if we still have geopolitical risks, we still have risks to these stocks.”

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7:29 a.m. ET: St. Louis Fed President Bullard calls for Fed to hike rates to more than 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year

St. Louis Fed President Jim Bullard said Friday that he wanted the Federal Reserve to more swiftly raise interest rates and begin the process of reducing its nearly $9 trillion balance sheet in order to bring down inflation.

Bullard was the only member of the Federal Open Market Committee to dissent with the Fed’s decision this week to raise interest rates by 25 basis points. Instead, Bullard wanted the Fed to raise by 50 basis points and also implement a plan to reduce the balance sheet.

“The combination of strong real economic performance and unexpectedly high inflation means that the Committee’s policy rate is currently far too low to prudently manage the U.S. macroeconomic situation,” Bullard said in a statement. “Moreover, U.S. monetary policy has been unwittingly easing further because inflation has risen sharply while the policy rate has remained very low, pushing short-term real interest rates lower. The Committee will have to move quickly to address this situation or risk losing credibility on its inflation target.”

Bullard said that in his dot on the “dot plot,” or Fed’s Summary of Economic Projections, he saw the Fed raising rates to above 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year.

“This would quickly adjust the policy rate to a more appropriate level for the current circumstances,” Bullard said. “The Committee has successfully moved in this manner before. In 1994 and 1995, the Committee made a similar discrete adjustment to the policy rate to better align it with the macroeconomic circumstances at that time. The results were excellent.”

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7:11 a.m. ET: Stock futures fall, giving back some gains

Here’s where markets were trading heading into the opening bell Friday morning:

  • S&P 500 futures (ES=F): -30.75 points (-0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,379.50

  • Dow futures (YM=F): -200 points (-0.58{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,261.00

  • Nasdaq futures (NQ=F): -104.75 points (-0.74{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,007.00

  • Crude (CL=F): +$1.34 (+1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $104.32 a barrel

  • Gold (GC=F): -$7.50 (-0.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,935.70 per ounce

  • 10-year Treasury (^TNX): +13.6 bps to yield 2.1400{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:13 p.m. ET Thursday: Stock futures

Here’s where stocks were trading Thursday evening:

  • S&P 500 futures (ES=F): -16.25 points (-0.37{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,394.00

  • Dow futures (YM=F): -140 points (-0.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,321.00

  • Nasdaq futures (NQ=F): -48.25 points (-0.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,063.50

NEW YORK, NEW YORK - MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday's rally. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally. (Photo by Spencer Platt/Getty Images)

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

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