(Bloomberg) — Nasdaq 100 Index futures tumbled as disappointing earnings and forecasts from technology bellwethers halted a rally in global stocks. The British pound defied broad dollar strength to rise after a U.K.
rate increase.
Contracts on the tech-heavy gauge were down 2% Thursday, dragged by a 22% premarket rout in Facebook parent Meta Platforms Inc. after a weaker-than-expected revenue forecast. S&P 500 Index futures were 0.8% lower.
The pound erased a drop after the Bank of England raised its key rate and began unwinding its quantitative easing. The euro extended losses after policy makers held rates as expected.
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%. Amazon.com Inc., which will post its financial results after U.S. market hours, slid 3.5%.
Europe’s Stoxx 600 gauge fell close to its 100-day moving average.
Gains for telecommunications and utilities companies limited the decline.
The BOE hiked interest rates for the second successive meeting, taking the key rate up 25 basis points to 0.5%. Officials also signaled they would start running down their bond holdings, halting reinvestments on their gilt pile and offloading their corporate-bond portfolio.
The pound advanced for a fifth day and traded as high as $1.3628.
The European Central Bank’s held its interest rates and said net buying under its emergency support program will end in March.
The euro slid 0.2%.
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 0.8% as of 7:51 a.m.
New York time
- Futures on the Nasdaq 100 fell 2%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 fell 0.5%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.3% to $1.1276
- The British pound was little changed at $1.3582
- The Japanese yen fell 0.4% to 114.89 per dollar
Bonds
- The yield on 10-year Treasuries advanced two basis points to 1.79%
- Germany’s 10-year yield advanced one basis point to 0.05%
- Britain’s 10-year yield advanced eight basis points to 1.33%
Commodities
- West Texas Intermediate crude fell 1.2% to $87.22 a barrel
- Gold futures fell 0.5% to $1,801.90 an ounce
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