Stocks fall, tech stocks lag, with Fed in focus

US stocks traded mixed on Friday, with investors continuing to ponder the Federal Reserve’s next policy move.

The S&P 500 and the Dow both rose, shaking off earlier losses. The Nasdaq Composite remained lower as technology stocks underperformed. As of Thursday’s close, the S&P 500 was still on track to post a weekly loss that would end a three-week winning streak if levels hold through Friday’s close.

Fresh comments from Fed officials remained in focus as another group of speakers offered mixed comments on the central bank’s future policy path. St. Louis Fed President James Bullard said on Thursday that he wanted the Fed to hit between 3% and 3.25% on the fed funds rate in the second half of this year, implying more aggressive front-end rate hikes in the short term. Bullard was the only dissenter at the Fed’s March meeting, calling for a bigger rate hike of 50 basis points versus the 25 basis point hike that actually happened.

While Bullard is now a longer-term hawk seeking greater Fed action to curb inflation, comments earlier this week suggested other central bankers are also warming to the idea of ​​monetary tightening. Fed Governor Lael Brainard said the Federal Open Market Committee (FOMC) was “ready for stronger action” should inflation readings remain elevated and justify such moves. And in Fed minutes released on Wednesday afternoon, the central bank revealed that “many participants … would have preferred a 50 basis point rate hike” and also indicated that the Fed is preparing to announce the start of its balance sheet soon. leaf expiry process.

However, other Fed officials offered a more measured approach to raising rates. In the comments Thursday, Atlanta Fed President Raphael Bostic said it would be “appropriate” to move the reference rate “closer to a neutral position,” suggesting a slightly less hasty series of rate hikes. Meanwhile, Chicago Fed President Charles Evans suggested the Fed would be able to “go neutral, look around and realize we’re not necessarily that far from where we need to be.” .

Taken together, the confluence of comments helped stocks, at least temporarily, halt their recent bout of volatility from earlier this week and kept government bond yields more resilient after a steep march higher. The benchmark 10-year yield was around 2.6%, the highest since 2019.

“The market has actually had a lot of information to digest – a lot of hawkish information from the Fed over the past few days. We were in a sell out mode. And I think [Thursday] we’ve finally had a chance to take a breather and recognize that there are some actual positive things happening, particularly in the stock markets,” said Kevin Nicholson, chief investment officer of global fixed income at RiverFront Investment Group, Yahoo Finance Live said on Thursday. “We still expect the earnings season to be better than expected… We also believe that you will be supported by a strong job market. “From this perspective, the economy is in excellent shape.”

“We expect equity markets to recover,” he added. “And we actually expect them to rebound to their highs of 4,800 in the few months, especially as they get more clarity from the Fed. As we all know, equity markets don’t like uncertainty.”

2:13 p.m. ET: Tesla, Block, Blockstream are reportedly working to mine Bitcoin using solar power in Texas

Tesla, Block — the company formerly known as “Square” — and blockchain firm Blockstream are reportedly collaborating on a plan to mine Bitcoin in Texas using solar power. according to CNBC on Friday.

Based on the report, the project would use solar and storage power from Tesla for renewable energy only and would include publicly available metrics on power delivery and bitcoin mining.

12:32 p.m. ET: Margins will be “the most important differentiator for stocks”

The first quarter corporate earnings season is set to get under way in earnest next week when a host of major financial institutions including JPMorgan, Morgan Stanley and Goldman Sachs report results. According to a number of analysts, corporate profit margins will be the key factor investors need to look at when assessing which companies are effectively navigating inflation.

“I think it’s really going to be the key thing to look at, corporate earnings. To date, we have seen significant upward revisions from analysts on a yearly basis throughout 2022,” Erin Browne, PIMCO portfolio manager, told Yahoo Finance Live on Friday. “And so the market isn’t really focused just yet on a slowdown or translation of the volatility that we’re seeing in some economic data, particularly inflation data, which is reflected in earnings expectations.”

“So I think that’s going to be the key to look out for. And really what the market will focus on is margins: how can companies manage the increased inflation and cost inflation they see coming through,” she added. “And that’s going to be the key differentiator for stocks.”

10:00 am ET: Peloton shares are trading mixed after Morgan Stanley predicts the number of connected fitness subscribers could surpass 3 million

Shares of Peloton (PTON) rose briefly by as much as 2% on Friday morning after analysts at Morgan Stanley said they expected the connected fitness company to beat guidance for current-quarter subscriber growth. However, the stock soon gave up its gains, trading about 1% lower mid-morning.

Morgan Stanley expects the company’s Connected Fitness subscribers to surpass 3 million in the fiscal third quarter. Earlier this year, Peloton said it expects to add 2.93 million subscribers in the third quarter, before growing to 3 million at the end of the fiscal year. Analysts at the bank cited website activity data for the prediction, which suggested Peloton was adding more new users than previously expected.

Morgan Stanley rates Peloton as even weight with a price target of $32 per share.

9:31 am ET: Stocks open mixed

Here’s where the markets traded on Friday morning:

  • S&P 500 (^GSPC): -6.65 (-0.15%) to 4,493.56

  • dow (^ DJI): +7.98 (+0.02%) to 34,591.55

  • Nasdaq (^IXIC): -63.13 (-0.45%) to 13,837.07

  • raw (CL=F): +$0.26 (+0.27%) to $96.29 a barrel

  • Gold (GC=F): +$2.50 (+0.13%) to $1,940.30 per ounce

  • 10-year government bonds (^TNX): +5.4 basis points to 2.708% yield

7:40 am ET Friday: Stock futures are higher, adding to Thursday’s gains

Here’s where the markets traded on Friday morning:

  • S&P 500 Futures (ES=F): +14 points (+0.31%) to 4,510.25

  • Dow futures (YM=F): +130 points (+0.38%) to 34,620.00

  • Nasdaq futures (NQ = F): +44.25 points (+0.3%) to 14,580.25

  • raw (CL=F): +$0.03 (+0.03%) to $96.06 a barrel

  • Gold (GC=F): -$3.30 (-0.17%) to $1,934.50 per ounce

  • 10-year government bonds (^TNX): +1.6 basis points for a yield of 2.67%

6:14 p.m. ET: Thursday: Stock futures are drifting sideways

Here are the major index futures trading Thursday night as the night session began:

  • S&P 500 Futures (ES=F): +2.25 points (+0.05%) to 4,498.50

  • Dow futures (YM=F): +12 points (+0.03%) to 34,502.00

  • Nasdaq futures (NQ = F): +13 points (+0.09%) to 14,549.00

NEW YORK, NEW YORK – APRIL 1: Traders work on the floor of the New York Stock Exchange during afternoon trading on April 1, 2022 in New York City. US stocks closed higher on the first day of trading in the second quarter of 2022 after the Labor Department released a jobs report that showed a rise well above pre-pandemic trends. (Photo by Michael M. Santiago/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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