U.S. stocks were set for a lower open on Monday as growth stocks came under pressure again, with investor focus on the Federal Reserve meeting this week where policymakers are widely expected to raise interest rates.
Megacap growth stocks slipped in premarket trading, with electric-car maker Tesla Inc down 1.6%. Amazon.com fell 1.8%, set to extend sharp declines from last week.
Apple slid 0.7% as the iPhone maker faced a possible hefty fine after EU antitrust regulators charged it with restricting rivals’ access to its technology used for mobile wallets.
Disappointing earnings forecasts from tech behemoths Amazon and Apple, as well hot inflation data spooked investors on Friday, pushing Wall Street to log its deepest daily losses since 2020.
Fed policymakers look set to deliver a series of aggressive interest rate hikes at least until the summer, with traders seeing a 92.8% chance of a 50-basis point hike on Wednesday when the policy decision will be released.
There won’t be economic or dot plot projections at this meeting, but the market will pay close attention to Fed Chair Jerome Powell’s press conference for clues on interest rates and balance sheet reduction.
“Everyone knows (the rate hike) is coming … what people are a little bit unsettled about is what is the guidance going to look like from Powell. Is the next meeting going to be 50 basis points again, or is it going to go up to 75 basis points,” Thomas Hayes, chairman at Great Hill Capital in New York, said.
The S&P 500 has fallen 13.3% so far in 2022, its steepest four-month decline to start any year since 1939, weighed down by rising bond yields, the conflict in Ukraine and pandemic-related lockdowns in China.
At 8:11 a.m. ET, Dow e-minis were down 25 points, or 0.08%, S&P 500 e-minis were down 12.5 points, or 0.3%, and Nasdaq 100 e-minis were down 60.25 points, or 0.47%.
The quarterly earnings season has been better-than-expected so far. Of the 275 companies in the S&P 500 that have reported earnings till Friday, 80.4% have topped Wall Street’s expectations.
Drugmakers Pfizer Inc and Moderna Inc, coffee chain Starbucks Corp, chipmaker Advanced Micro Devices Inc and breakfast cereal maker Kellogg Co are some of the companies reporting results this week.
Activision Blizzard climbed 2.6% after Warren Buffett said Berkshire Hathaway Inc has taken a 9.5% stake in the “Call of Duty” game maker.
Occidental Petroleum fell 1.6%, the most among energy stocks, as crude prices fell over 3% on concerns over weak economic growth in China.
Spirit Airlines slid 9.4% after the ultra low cost carrier rejected JetBlue Airways Corp’s $33-per-share takeover offer, saying it had a low likelihood of winning approval from government regulators. JetBlue shares rose 2%.
ISM manufacturing activity data for April is due at 10 a.m. ET.