Wall Street is pointing lower before the opening bell, which could turn into just the second week of losses this year as the earnings seasons winds down.
Futures for the Dow Jones industrials lost 0.4% and the S&P 500 fell 0.5%.
After focusing on the Federal Reserve’s latest interest rate hike and corporate earnings reports the past few weeks, markets will turn their attention back to economic data next week, with the government releasing reports on U.S. wholesale and consumer inflation. There are still some big companies that have yet to report earnings, but not the deluge of the past few weeks.
“Now that markets have absorbed hawkish reactions by central bankers after the latest rate announcement and data releases, the focus will shift back to data,” Francesco Pesole, a strategist at ING, said in a report.
Global stocks have been flipping from gains to losses and back again amid uncertainty about where interest rates and inflation are heading. High rates can drive down inflation but also raise the risk of a recession and hurt investment prices.
Earlier this week, Fed Chair Jerome Powell said that if the U.S. job market further strengthens in the coming months or inflation readings accelerate, the Fed might have to raise its benchmark interest rate higher than it now projects.
Powell’s remarks followed the government’s blockbuster report last week that employers added 517,000 jobs in January, nearly double December’s gain. The unemployment rate fell to 3.4%, its lowest level in 53 years.
“The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more,” Powell told the Economic Club of Washington.
Lyft lost close to a third of its value overnight after the ride-hailing company gave a grim outlook after the bell on Thursday. Lyft shares have fallen more than 32% since markets closed Thursday, to around $11 per share. They cost more than $40 one year ago.
In Europe, France’s CAC 40 lost 1.5% in midday trading, while Germany’s DAX shed 1.7%. Britain’s FTSE 100 fell 0.7%.
China reported that its consumer inflation rate ticked up last month as demand revived due to the lifting of pandemic restrictions and travel and spending connected with the Lunar New Year, the country’s biggest holiday.
Producer prices fell 0.8% in January after a 0.7% decline the month before. Consumer price inflation rose to 2.1% from a 1.8% climb in December.
“While most agree the overall economic growth will recover in China this year, there appears to be a lack of conviction on the magnitude of that rebound,” Stephen Innes, managing partner at SPI Asset Management, said in a report.
“But we are at a fork in the road right now regarding whether China will follow a Western reopening game plan or a more Asia-styled cautious reopening approach.”
Japan’s benchmark Nikkei 225 added 0.3% to finish at 27,670.98. Australia’s S&P/ASX 200 slipped 0.8% to 7,433.70. South Korea’s Kospi declined 0.5% to 2,469.73. Hong Kong’s Hang Seng shed 2.0% to 21,190.42, while the Shanghai Composite was down 0.3% at 3,260.67. Shares in Mumbai and Taiwan also declined.
Oil prices rose after Russia announced Friday that it will cut oil production by 500,000 barrels per day next month. Western countries had capped the price of Russia’s crude over its invasion of Ukraine. Brent crude, the international standard, rose $1.35 to $85.85 a barrel.
Benchmark U.S. crude added $1.24 to $79.30 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the U.S. dollar fell to 130.86 Japanese yen from 131.44 yen. The euro cost $1.0694, down from $1.0739.
On Thursday, the S&P 500 fell 0.9% while the Dow industrials lost 0.7%. The Nasdaq composite sank 1%.
Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.