By Amruta Khandekar and Shristi Achar A
(Reuters) -Wall Street was set to open lower on Friday after a three-day selloff, with megacap growth stocks among lead decliners, as evidence of a resilient U.S. economy fanned fears of interest rates staying higher for longer.
The three main U.S. stock indexes have shed over 2% each this week after a spate of strong economic data, including a fall in weekly jobless claims, caused investors to dial back expectations of rate cuts and drove up government bond yields.
The yield on the 10-year Treasury note hit a ten-month high of 4.328% in the previous session and came within a whisker of its highest level since 2007. [US/]
“The drivers really have been of late the rising Treasury yields and that is signaling a more risk-off investor sentiment,” said Art Hogan, chief market strategist at B Riley Wealth.
“Investors are looking at (better-than-expected economic data) and saying the Fed likely isn’t restrictive enough yet.”
Traders see a nearly 91% chance of the Fed holding rates at current levels at its September meeting, according to the CME Group’s Fedwatch tool.
On Friday, rate-sensitive big technology and growth stocks such as Apple, Amazon.com and Tesla slipped between 1% and 2.6% in premarket trade even as Treasury yields took a breather.
The tech-heavy Nasdaq had closed at a two-month low in the previous session.
Risk sentiment has also been hurt in recent days by China’s sluggish economic recovery and growing concerns about its property market. U.S.-listed shares of Chinese companies JD.Com and Alibaba Group fell 4.7% and 3.3% respectively.
Among major movers of the day, Applied Materials rose 0.5% after the chip equipment maker forecast fourth-quarter profit above analysts’ estimates and posted better-than-expected third-quarter earnings.
Estee Lauder lost 7.0% after the cosmetics maker forecast its annual net sales and profit below Street estimates.
With no major economic data due on Friday, focus will now shift to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole economic symposium next week.
Earnings from chip designer Nvidia, which have rallied this year on enthusiasm around artificial intelligence, will also grab the spotlight in the coming days.
At 8:25 a.m. ET, Dow e-minis were down 173 points, or 0.5%, S&P 500 e-minis were down 27.5 points, or 0.63%, and Nasdaq 100 e-minis were down 137.75 points, or 0.93%.
Shares of Keysight Technologies dropped 12.1% on the electronic equipment maker’s downbeat fourth-quarter forecast.
Hawaiian Electric shares jumped 17.6% after the utility firm sought expert advice amid growing scrutiny over its role in the Maui wildfires, but said that its goal was not to restructure the company.
Shares of cryptocurrency firms such as Coinbase Global, Bitfarms and Riot Platforms Inc fell between 4% and 6% in premarket trading as bitcoin hit a fresh two-month low.
(Reporting by Amruta Khandekar; Editing by Maju Samuel)
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