(Bloomberg) — Nasdaq 100 Index futures tumbled as disappointing earnings and forecasts from technology bellwethers halted a rally in global stocks. The dollar strengthened before rate decisions in Europe and the U.K.
Contracts on the tech-heavy gauge were down 2.2% Thursday, even as Facebook parent Meta Platforms Inc. plunged in premarket New York trading on a weaker-than-expected revenue forecast. S&P 500 Index futures were 1.2% lower. Technology stocks were the worst performers on Europe’s benchmark gauge. The euro and British pound lost at least 0.2% against the dollar.
Weak numbers from Meta to Qualcomm Inc. and Spotify Technology SA jolted investors who had bet a strong earnings season would keep equities attractive and counter some of their lingering worries including Federal Reserve tightening and stubborn inflation. That’s stalled the biggest four-day gains in MSCI Inc.’s gauge of world stocks and refueled traders’ switch into less expensive value stocks.
“What people care about is earnings and inflation,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “Disappointing Facebook results, and a plunge in Meta shares in the afterhours trading calls for a red session in the U.S.”
Meta shares, which had plunged 22% in late New York trading, continued its losses in Thursday’s premarket session. NVidia Corp. and Qualcomm lost more than 3.8%. Amazon.com Inc., which will post its financial results after U.S. market hours, slid 3.7%.
Europe’s Stoxx 600 gauge fell close to its 100-day moving average. Gains for energy and commodities companies limited the decline.
The focus in Europe was rather on the European Central Bank’s rate decision. A record regional inflation print is adding pressure on policy makers to act amid concerns they may be too slow in fighting inflation.
Meanwhile, The Bank of England was on the verge of a historic decision to deliver the first back-to-back interest-rate increase since 2004 and take the initial steps toward unwinding some of its 895 billion-pound ($1.2 trillion) stimulus program.
The poorly received earnings reports from the U.S. tech giants are a challenge for dip buyers hoping that corporate performance will ease worries about central bank interest-rate hikes. Markets have swung sharply and stocks are nursing losses this year as officials pare stimulus to curb inflation.
“Volatility is here to stay,” Anna Han, equity strategist at Wells Fargo Securities, said on Bloomberg Television. “Our outlook for 2022 was that we’d see more spikes in volatility. With that choppiness, with that unpredictability, investors are going to express that by compressing multiples.”
Oil fell from a seven-year high eased from a seven-year high as traders waited to see whether OPEC+ can deliver on its latest promised increase in supply.
Meanwhile, ADP figures before Friday’s offical jobs report showed employment at U.S. firms shrank in January by the most since the early days of the pandemic. The omicron virus variant dealt a swift yet likely temporary blow to the labor market.
For more market analysis, read our MLIV blog.
What to watch this week:
- Earnings are due from Amazon, Ford Motor
- Bank of England, European Central Bank rate decisions, Thursday
- Fed Board of Governors confirmation hearing, Thursday
- U.S. factory orders, initial jobless claims, durable goods, Thursday
- U.S. payrolls report for January, Friday
- Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 1.2% as of 6:39 a.m. New York time
- Futures on the Nasdaq 100 fell 2.2%
- Futures on the Dow Jones Industrial Average fell 0.4%
- The Stoxx Europe 600 fell 0.6%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro fell 0.2% to $1.1280
- The British pound fell 0.2% to $1.3551
- The Japanese yen fell 0.3% to 114.84 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.77%
- Germany’s 10-year yield was little changed at 0.04%
- Britain’s 10-year yield advanced one basis point to 1.27%
Commodities
- West Texas Intermediate crude fell 1.4% to $86.99 a barrel
- Gold futures fell 0.4% to $1,803.90 an ounce
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