Stock Market News

Stock futures were lower in premarket trading Friday as a tough week for the three major indexes neared its close.

Futures for the Dow Jones Industrial Average shed 127 points, or 0.4%, while S&P 500 futures slid 0.5%. Nasdaq futures lost 0.7%.

On Thursday, the Dow closed lower for its fourth consecutive trading day, while the S&P 500 and Nasdaq snapped three-day losing streaks.

This week, the Dow has slipped 1%, the S&P 500 has fallen 0.6%, and the Nasdaq has shed 0.4%.

But one bad week doesn't make a terrible month. Just the opposite: All three indexes are higher in June, with the Dow up 3.2%, the S&P 500 up 4.8%, and the Nasdaq up 5.4%. This week might just be a moment for investors to recalibrate.

“While we understand that investors are tired of the bear market, we fear that investors are putting too much faith in this recent stock market rally,” wrote Ryan Belanger, founder and managing principal of wealth management firm Claro Advisors.

“At 20 times forward earnings, the S&P 500 is again trading at a rich premium to historic market multiples, buoyed by confidence that the Federal Reserve is done with rate hikes and a clearer picture of what a soft landing might look like. This confidence is misaligned,” Belanger added.

U.S. stock futures were pointing to losses early on Friday as investors digest Federal Reserve Chairman Jerome Powell’s testimony to Congress and jobless claims.

Powell continued to emphasize the possibility of more than one further rate hike in his testimony to lawmakers, seeming to push back against market expectations for a maximum of one rate increase.

“While the overall rhetoric has been nearly identical to last week’s press conference, Powell seemed to add more weight on the near-term prospects of further rate hikes compared to last week–implicitly encouraging markets to close the gap with the Dot Plot projections,” analysts at ING wrote in a research note on Friday.

Investors weren’t taking much confidence from Treasury Secretary Janet Yellen saying the chances of a U.S. recession appeared to be lower in an interview with Bloomberg, citing a resilient labor market and falling inflation. Jobless claims data released for last week showed the number of Americans who applied for unemployment benefits was flat at 264,000, a nearly two-year high.

Dow Jones Industrial Average futures were down 121 points, or 0.4%. S&P 500 futures were down 0.5%, and Nasdaq 100 futures fell 0.7%.

European stocks were broadly flat on Friday, bringing an end to a gloomy week marked by a series of hawkish central bank decisions to control inflation.

The Stoxx Europe 600 Index was flat despite a drag from Siemens Energy. The German energy company fell 33% after it withdrew its annual profit guidance, having identified a substantial increase in the failure rates of wind-turbine components.

The macroeconomic picture for the euro zone was downcast after data from a purchasing managers' survey on Friday suggested weaker growth. The HCOB Flash Eurozone Composite PMI Output Index—which gauges activity in the manufacturing and services sectors—fell 50.3 in June, from a downwardly revised 52.8 in May.

“Overall, it looks like the eurozone economy has entered a sluggish period where economic growth is hovering around 0%,” analysts at ING wrote in a research note.

Asian equity markets were sinking across the region as traders digested the prospect of further U.S. interest-rate increases and rate hikes from other global central banks.

Hong Kong’s Hang Seng Index led the decline, down 1.7% on a return to trading after a holiday. Mainland Chinese markets were closed.

Japan’s Nikkei 225 fell 1.5%. The drop came despite the Japanese yen hitting its lowest level against the dollar since November last year. The dollar was up 0.1% to 143.19 yen as diverging monetary policy took its toll on the Japanese currency. Last year, Japanese authorities launched verbal interventions when the dollar rose to more than 144 against the yen.