Stock futures were lower in early morning trading Friday as the S&P 500 tried to avoid another losing week amid busy earnings and rising bond yields.
Futures on the Dow Jones Industrial Average dipped 118 points, or 0.3%. S&P 500 futures fell 0.5% and Nasdaq 100 futures shed 0.4%.
The early morning action followed a dramatic reversal Thursday that saw major averages wiping earlier gains and closing lower. The Dow ended the day more than 300 points lower, while the S&P 500 dropped nearly 1.5%. The tech-heavy Nasdaq Composite bore the brunt of the sell-off on surging rates, sliding 2%.
“Stagflation concerns resurface on the back of real-time signs of a tight labor market and waning business sentiment, coupled with another bounce in 10-year Treasury yields — and all peppered with a deluge of earnings releases,” Chris Hussey, a managing director at Goldman Sachs, said in a note.
For this week, the Dow is up 1% and on pace to break a three-week losing streak. The S&P is up less than 0.1% on the week and attempting to break a two-week losing streak. The Nasdaq, however, is down 1.3% week to date, on track to post its third negative week in a row.
Weighing on sentiment Thursday was Federal Reserve Chair Jerome Powell’s comment on the possibility of a larger-than-usual rate hike for next month.
Powell said during an International Monetary Fund panel moderated by CNBC’s Sara Eisen that taming inflation is “absolutely essential” and a 50-basis-point hike is on the table for May.
After reversing higher on Powell’s comments, the 10-year Treasury yield closed at 2.92% on Thursday. The 10-year yield was higher again on Friday, inching back up to 2.94%, near a three-year high.
Meanwhile, the first-quarter earnings season continues to roll on.
Snap shares fell 3% in premarket trading as the social media platform reported first-quarter revenue short of expectations even after showing strong growth in daily users.
Gap shares plunged 13% in premarket trading after the company announced the CEO of its Old Navy division, Nancy Green, is leaving the business this week. Gap also slashed its outlook for net sales growth in fiscal 2022.
Verizon is slated to post results before the bell Friday.
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