(Bloomberg) — Stocks and futures slumped on Friday amid a drop in global technology shares as investors worry about the impact of higher interest rates and the fast-spreading omicron virus variant.
The Nasdaq 100 led a drop in U.S. contracts, while tech shares were among the biggest declines in Europe and Asia. Investors also braced for a quarterly rebalancing of the S&P 500 Index after the market close and the so-called triple witching expiration of equity derivatives that could magnify market moves.
Central banks globally are prioritizing the fight against elevated inflation by tightening monetary settings, while also keeping a wary eye on the impact of omicron. That backdrop has investors questioning whether global stocks are due for a rougher patch after almost doubling from pandemic lows.
The 10-year Treasury yield and dollar were little changed. In Turkey, the lira touched an all-time low. Oil retreated for the first time in three days and European natural gas prices plunged from a record close after Russia in the last minute topped up supplies to the region.
“All three major central banks making decisions this week have demonstrated that they no longer regard the downside risks to economic activity over the coming months as outweighing the need to address inflation pressure,” Adrian Hilton, head of global rates and currency at Columbia Threadneedle Investments, wrote in a note to investors, refering to the Federal Reserve, the Bank of England and the European Central Bank.
Russia raised its key interest rate on Friday and left the door open to further increases. Meanwhile, Japan’s monetary authority lengthened its cautious withdrawal in a move that contrasts with the urgency of other major central banks.
In U.S. premarket trading, Tesla Inc. fell as Elon Musk sold another chunk of shares in the electric vehicle maker, while Biogen Inc. dropped after a setback to its treatment of Alzheimer’s disease.
Italian biotech firm DiaSorin SpA, Nordic Semiconductor ASA and Cellnex Telecom SA were among the biggest declines in Europe.
Meanwhile, South Africa delivered some positive news on the omicroncoronavirus variant on Friday, reporting a much lower rate of hospital admissions and signs that the wave of infections may be peaking.
Here are some key events this week:
S&P Dow Jones Indices quarterly rebalance effective after markets close, Friday.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.3% as of 6:50 a.m. New York time
- Futures on the Nasdaq 100 fell 0.7%
- Futures on the Dow Jones Industrial Average fell 0.1%
- The Stoxx Europe 600 fell 0.6%
- The MSCI World index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.1318
- The British pound fell 0.2% to $1.3290
- The Japanese yen rose 0.2% to 113.44 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.41%
- Germany’s 10-year yield declined two basis points to -0.37%
- Britain’s 10-year yield was little changed at 0.76%
Commodities
- West Texas Intermediate crude fell 1.7% to $71.13 a barrel
- Gold futures rose 0.7% to $1,809.90 an ounce
