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(Reuters) -U.S. stock index futures fell on Friday after a three-day selloff on Wall Street, as evidence of a resilient U.S. economy spurred fears that the Federal Reserve would hold interest rates for longer than previously expected.
Wall Street’s main 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 relative strength of the U.S. economy is prompting fears of rates sticking higher for longer across the Atlantic and a potential shift from the current easing of inflationary pressures. This is reflected in a big surge in U.S. government bond yields,” said Russ Mould, investment director at AJ Bell.
Traders see a nearly 91% chance of the Fed holding rates at current levels at its September meeting, according to the CME Group’s (NASDAQ:CME) Fedwatch tool.
On Friday, big technology and growth stocks slipped in premarket trade even as Treasury yields eased, with Tesla (NASDAQ:TSLA) down 2.3% and leading declines.
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 (NASDAQ:JD).Com and Alibaba (NYSE:BABA) Group fell 3.7% and 2.9% respectively.
Among major movers of the day, Applied Materials (NASDAQ:AMAT) rose 2.5% after the chip equipment maker forecast fourth-quarter profit above analysts’ estimates and posted better-than-expected third-quarter earnings.
Estee Lauder (NYSE:EL) lost 2.9% after the cosmetics maker forecast its annual net sales and profit below Street estimates.
Deere (NYSE:DE) & Co added 0.4% after the construction equipment maker raised its annual profit outlook.
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 (NASDAQ:NVDA), which have rallied this year on enthusiasm around artificial intelligence, will also grab the spotlight in the coming days.
At 7:13 a.m. ET, Dow e-minis were down 54 points, or 0.16%, S&P 500 e-minis were down 12.25 points, or 0.28%, and Nasdaq 100 e-minis were down 80.5 points, or 0.54%.
Shares of Keysight Technologies (NYSE:KEYS) dropped 10.8% on the electronic equipment maker’s downbeat fourth-quarter forecast.
Hawaiian Electric shares rose 1.0% in volatile trade after the utility company said it was not looking to restructure.
