US stock futures are trading flat on Friday ahead of US durable goods, manufacturing and services data as well as St. Louis Fed President James Bullard’s speech. Major indices saw higher volatility on Thursday during regular trading as investors struggled with tightening monetary conditions and an ongoing banking crisis.
On Thursday, the major indices spiked higher at the start of trading on speculation that the Federal Reserve will soon halt its tightening campaign and investors flocked to technology stocks, but most of the gains were quickly lost due to persistent worries over the banking sector. The market remained lackluster despite Treasury Secretary Janet Yellen’s remarks that authorities are ready to take additional measures if necessary to stabilize US banks.
IT giants have mainly outperformed in the wake of the banking upheaval that has shaken markets and increased fears of a recession. The unexpected easing of US unemployment benefit claims for a second week highlights the continued tightness of the labour market, as firms remain reluctant to make staff reductions. After a negative correction to the prior month’s data, sales of new homes unexpectedly increased in February, showing that the housing market is starting to normalise after a turbulent year.
Rates were increased by a quarter point by the Fed on Wednesday, marking its ninth straight hike, and by a quarter point by the Bank of England the following day, marking its eleventh straight increase. Before stopping, the European Central Bank is still anticipated to provide at least one more increase and perhaps two. Next month, it is anticipated that Australia’s policymakers will continue to hold the line before beginning to reduce.
The central banks will likely be facing a severe economic slowdown or recession that would harm corporate profitability, according to the scale of the rate cuts that are currently priced into the financial markets.