Key Points:
- U.S. stock futures dipped amidst concerns over potential prolonged higher interest rates and mixed earnings.
- Mixed earnings from Amazon.com Inc. added to market uncertainty. U.S. indices registered significant losses on Tuesday, snapping a 5-month winning streak.
- The technology sector faced profit-taking, with notable declines observed in heavyweights like Microsoft Corporation, Alphabet Inc, and Tesla Inc.
- Amazon.com rose 1.3%, Advanced Micro Devices Inc. dropped nearly 7%, and Starbucks Corporation tumbled nearly 12% after reporting mixed earnings.
In evening trading on Tuesday, U.S. stock index futures dipped as concerns regarding potentially prolonged higher interest rates intensified ahead of the Federal Reserve’s meeting conclusion. Additionally, mixed earnings from tech giant Amazon.com Inc. further contributed to the market’s uncertainty.
S&P 500 Futures retreated by 0.2% to 5,055.00 points, while Nasdaq 100 Futures experienced a 0.4% decline to 17,494.75 points. Dow Jones Futures also fell by 0.1% to 37,961.0 points. The decline in futures mirrored a subdued session on Wall Street, where apprehensions about the Federal Reserve’s stance prompted profit-taking in the technology sector.
Investors eagerly await the Federal Reserve’s decision, which is widely anticipated to maintain interest rates, but Chairman Jerome Powell’s commentary is expected to offer insights into a potentially hawkish outlook due to recent inflationary pressures.
An unexpected uptick in the employment cost index on Wednesday added to concerns surrounding persistent inflation. Analysts now project a potential delay in rate cuts until September if implemented this year, signaling a less accommodative monetary policy that could dampen market sentiment.
Tuesday witnessed a notable sell-off across Wall Street indices, with the S&P 500 declining by 1.6% to close at 5,035.69 points, the NASDAQ Composite falling by 2% to 15,657.82 points, and the Dow Jones Industrial Average sinking by 1.5% to 37,815.92 points. April marked a reversal in fortune for these indexes, ending a five-month winning streak with significant losses.
The technology sector bore the brunt of the sell-off, with prominent companies like Microsoft Corporation, Alphabet Inc, and Tesla Inc experiencing declines ranging from 2% to 5.5% following a robust rally in previous sessions. Post-market trading saw these stocks trading in a flat-to-low range. Aftermarket movers included Amazon.com, rising 1.3%, Advanced Micro Devices Inc., sliding nearly 7%, and Starbucks Corporation, tumbling nearly 12% after reporting mixed earnings.
