U.S. stocks fell Friday morning as investors pointed to a continued risk-off tone, with tech stocks underperforming, bond yields higher, and a stronger dollar.
The S&P 500 (^GSPC) slumped by 0.7%, while the Dow Jones Industrial Average (^DJI) declined by 0.1% during midday trading. The technology-heavy Nasdaq Composite (^IXIC) plunged by more than 1% . Early in the session, indexes were headed for their lowest close since last month.
Tech stocks underperformed, while consumer discretionary and communication services were the worst sector performers.
The yield on the benchmark 10-year U.S. Treasury note rose to 3.88% Friday morning. The dollar index added 0.4% to trade at $104.32. Energy traded weaker, with U.S. benchmark WTI crude oil down about 3.5% to around $75.80 a barrel.
Stocks continued a sell-off from Thursday, when investors parsed through more hotter-than-expected economic data and hawkish Fedspeak.
On the macro front Friday, January’s import prices slumped for the seventh consecutive month, declining to 0.2%, as lower fuel prices more than offset higher nonfuel prices, the Labor Department said Friday.
Federal Reserve Bank of Richmond President Thomas Barkin continued a more hawkish tone from officials, saying the labor market remains “quite hot” and the “risk of doing too much outweighs the risk of doing too little.” Federal Reserve Governor Michelle Bowman added more to that sentiment by signaling that central bank will need to continue raising interest rates until inflation reaches its 2% goal.
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.
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