Wall Street fell amid a broad-based selloff as risk-off sentiment prevailed following a slew of Fed officials’ hawkish speeches. Fed Bank of New York President John Williams said the monetary policy needed to stay restrictive for the time being, while the Fed Governor Christopher Waller warned interest rates could go higher than expectations, echoing the Fed Chair Powell’s rhetoric on Tuesday. The US bond yields jumped since the US reported strong job data, sparking concerns about the Fed’s rate path. Traders became cautious after a month-long rally in the stock markets during a weak earnings season. Profit-taking might have also caused the market correction as broad markets were overbought.
Asian markets are set to open lower as indicated by futures pricing. The ASX 200 futures were down 0.42%, Nikkei 225 futures fell 0.76%, and Hang Seng Index slid 0.46%.
- All the 11 sectors in the S&P 500 finished lower, with communication services leading losses, down 4%. The Technology and Utilities stocks also lagged behind the broad markets, down 1.2% and 1.7%, respectively. Alphabet’s shares slumped more than 7% after Google’s AI chatbot “Bard” responded with inaccurate answers in an online advertisement.
- Disney’s shares rose more than 1% in after-hours trading due to a beat on the fourth quarter earnings expectations. The entertainment giant’s earnings per share are at $0.99 on $23.51 billion in revenue, higher than the estimated $0.78 and $23.37 billion, respectively The Disney + total subscribers are 161.8 million, beating an expected 161.1 million.
- Microsoft faces the UK regulator’s scrutiny over competition concerns of its $69 billion acquisition of Activision Blizzard. The UK’s Competition and Markets Authority raised concerns that it could harm competition in the gaming industry and may require Microsoft to meet a few requirements to complete the deal.
- The US dollar index consolidated above 103 as bond yields stayed around at a one-month high. The king dollar shows signs of further strengthening from a technical perspective. The recent Fed’s hawkish rhetoric promoted the rebound while pressing on other major currencies.
- Crude oil extended the third straight day gain amid China’s reopening optimism. Despite improved demand prospects, OPEC + is expected to stick with their current output quota through 2023. Tight supply is still a major concern if there is no global economic recession.
