Stock futures moved into the red zone in the pre-market trading hours of Friday, as investors end a busy earnings week amid another growth spurt in bond yields. Moreover, cautious sentiments regarding the Fed’s latest comment on a possible 50 basis point hike in May also played a part in the downward movement.
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Futures contracts tied to the Dow Jones Industrial Average (DJIA) were down 0.18%, while those on the S&P 500 (SPX) inched 0.19% lower, as of 3.50 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures fell short of the flatline by 0.16%.
During the regular trading hours on Thursday, the market, which began on a positive note, managed to shrug off its gains of the day at the Closing Bell. The major indexes ended the day in the red, with the Dow losing 1.05%, the S&P 500 falling 1.48%, and the Nasdaq 100 down 1.99%.
On Thursday, Federal Reserve Chairman Jerome Powell stated that an unusually high interest rate hike is expected to be implemented next month to curb inflation as quickly as possible. This explains why the technology stock-laden Nasdaq 100 fell the most on Thursday. Notably, the technology sector is highly sensitive to interest rate hikes, as the ability to borrow for tech-innovation purposes is hampered.
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