U.S. stock futures fell Friday morning as investors pointed to a continued risk-off tone ahead of the open, with tech stocks underperforming, bond yields higher, and a stronger dollar.
Futures tied to the S&P 500 (^GSPC) slumped by 0.6%, while futures on the Dow Jones Industrial Average (^DJI) declined by 0.5%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) plunged by 0.8%.
Tech stocks are underperformed, while consumer discretionary and communication services were the worst performers.
The yield on the benchmark 10-year U.S. Treasury note rose to 3.9% Friday morning. The dollar index added 0.6% to trade at $104.50. Energy traded weaker, with WTI crude oil price down at $76.60 a barrel.
Stocks sold off on Thursday as investors parsed through more hotter-than-expected economic data and hawkish Fedspeak.
On the macro front, investors will be anticipating more data to roll in Friday, including January’s import prices data. However, given the weaker dollar last month, “firmer commodity prices may put some upward pressure on import prices,” said Andrew Tyler, US Market Intelligence team at JP Morgan.
Also on deck before Friday’s opening bell, Wall Street will hear from two Fed officials: Federal Reserve Bank of Richmond President Thomas Barkin and Federal Reserve Governor Michelle Bowman.
Data out Thursday showed supplier prices rose at a monthly increase of 0.7%, hotter than the 0.4% expected by economists. Coupled with a hot consumer price reading for the month, recent data has driven worries that the central bank will maintain its hawkish stance, drive interest rates higher, and keep them there longer.
That narrative got a boost following two other Fed officials’ commentary on Thursday suggesting larger rate hikes this month amid sticky inflation.
“On the back of those comments, investors moved to price in a growing probability that the Fed might choose to move by more than 25bps at the next meeting in March,” Jim Reid and colleagues at Deutsche Bank wrote in an early morning note Friday morning.
“Indeed, looking at Fed funds futures, a +28.2bps hike is now priced in for the next meeting, which is the highest to date, and means at least a small chance is priced that they might opt for a bigger move,” the team at Deutsche Bank said.
In single stock moves, shares of DraftKing (DKNG) rose after the online sports betting company reported fourth-quarter revenue of $855.1 million, above analysts expectations of $798.6 million. Active monthly payers climbed 31% to 2.6 million, higher than the 2.5 million forecasted.
Applied Materials (AMAT) stock added over 1% in premarket trading after the semiconductor equipment vendor topped Wall Street’s expectations for the current period and its fiscal first quarter.
Intuitive Machines (LUNR) shares traded lower Friday as the company closed its SPAC merger with Inflection Point Acquisition this week. The moon-landing company could be the first American private venture to touch down on the moon.
DoorDash (DASH) shares climbed after the company reported a 40% revenue jump to $1.8 billion compared to the prior year. Total orders also came in higher at 467 million, a 27% increase from the previous year. The delivery service company also announced a stock buyback program and projected an upbeat guidance for the current quarter.
Shares of Moderna (MRNA) sank Friday morning after the company’s flu vaccine study failed to reach one its goals.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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