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VIX trades above 20 for a second day
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Moderna slides after mixed data from flu vaccine trial
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DoorDash climbs on buyback, strong outlook
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Futures down: Dow 0.43%, S&P 0.62%, Nasdaq 0.82%
(Adds comment, updates prices)
By Johann M Cherian and Sruthi Shankar
Feb 17 (Reuters) - U.S. equity indexes were set for a
lower open on Friday on fears that accelerating inflation in the
face of a sturdy U.S. economy could prompt the Federal Reserve
to err on the side of caution by keeping monetary policy
restrictive through the year.
Stock markets were volatile this week after economic data
pointed to elevated U.S. inflation, a tight job market and
resilience in consumer spending, all factors that could provide
more room for the Fed to raise borrowing costs.
Goldman Sachs said it was expecting the Fed to raise rates
three more times this year and by a quarter of a percentage
point each. Traders are expecting at least two more rate
increases and a terminal rate of 5.3% by July. "We've seen the rates market catch up to the Fed commentary,
and the really robust data in the U.S. was the catalyst for
equities to pay attention," said Laura Cooper, senior macro
strategist at BlackRock.
"We're reaching an inflection point where further rate hikes
being priced in will be a negative for equity markets because
the data suggests that inflation risks are tilted to the
upside."
All three main indexes clocked their worst annual losses in
2022 since the 2008 financial crisis, dented by the Fed's
fastest monetary tightening in four decades.
After a respite in January on hopes that the central bank
might be nearing the end of its rate-hike cycle, the indexes
have wavered this month. The CBOE Volatility index , also
known as Wall Street's fear gauge, traded above 20 points for a
second session in a row.
At 8:38 a.m. ET, Dow e-minis were down 145 points,
or 0.43%, S&P 500 e-minis were down 25.25 points, or
0.62%, and Nasdaq 100 e-minis were down 102.25 points,
or 0.82%.
Traders will parse commentary by central bank officials
including Richmond Fed President Thomas Barkin and Governor
Michelle Bowman later in the day to assess the tone of Fed's
monetary policy outlook.
Moderna Inc fell 4.9% in premarket trading after
the drugmaker said its experimental messenger RNA-based
influenza vaccine failed to show it was at least as effective as
an approved vaccine versus less prevalent influenza B.
Manchester United rose 2.3% after hitting a record
close in the previous session. The Telegraph reported on
Thursday that Saudi Arabia has submitted a bid for the British
soccer club ahead of Friday's deadline.
DoorDash Inc climbed 3.5% after the food delivery
company said it would buy back $750 million worth of stock and
projected a key profit measure above Wall Street estimates.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru;
Editing by Alden Bentley and Anil D'Silva)
