Stocks rocked by rate-hike fears

Growth stocks outperformed

U.S. equity markets were pressured Friday as the Federal Reserve signaled rate hikes could come as early as next year. 

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 35061.55 +238.20 +0.68%
SP500 S&P 500 4411.79 +44.31 +1.01%
I:COMP NASDAQ COMPOSITE INDEX 14836.991139 +152.39 +1.04%

The Dow Jones Industrial Average fell 532 points, or 1.57%, declining for a fifth straight day, while the S&P 500 and the Nasdaq Composite lost 1.31% and 0.92%, respectively. 

The selling came after St. Louis Fed President James Bullard told CNBC that a rate hike could come next year – ahead of the Fed's 2023 target disclosed Wednesday. The yield on the 10-year note slipped below 1.45% and closed at its lowest level since March 2.

Ticker Security Last Change Change %
TSLA TESLA, INC. 643.38 -5.88 -0.91%
SQ SQUARE, INC. 264.00 +3.41 +1.31%

Growth stocks including Tesla Inc. and Square Inc., which typically benefit from lower interest rates, outperformed. 

Ticker Security Last Change Change %
BAC BANK OF AMERICA CORP. 37.70 -0.26 -0.68%
JPM JPMORGAN CHASE & CO. 150.64 -0.29 -0.19%

At the same time, bank stocks like Bank of America Corp. and JPMorgan Chase & Co were weaker as lower interest rates reduce their net interest margins. 

Ticker Security Last Change Change %
NVDA NVIDIA CORP. 195.58 -0.36 -0.18%
MU MICRON TECHNOLOGY, INC. 75.94 +0.41 +0.54%
INTC INTEL CORP. 53.00 -2.96 -5.29%

Elsewhere, chipmakers including Nvidia Corp., Micron Technology Inc. and Intel Corp. were mixed after a bipartisan group of U.S. senators proposed a 25% tax credit for investments in semiconductor manufacturing. U.S. chip production has fallen sharply in recent years to 12% of global output, down from 37% in 1990. 

Ticker Security Last Change Change %
CAI CAI INTERNATIONAL INC 56.10 +0.27 +0.48%

In deals, container leasing and management company CAI International Inc. has agreed to be taken over by Japan’s Mitsubishi HC Capital Inc. for $1.1 billion, or $56 per share. The price represents a 47% premium to where shares closed on Thursday. 

Ticker Security Last Change Change %
EBAY EBAY, INC. 73.54 +1.48 +2.05%

Online marketplace eBay Inc. and Norway’s Adevinta were granted regulatory approval for the approximately $13 billion deal for the former’s classified ads business. EBay will receive $2.5 billion in cash and 540 million Adevinta shares.  

Ticker Security Last Change Change %
ADBE ADOBE, INC. 625.87 +2.19 +0.35%

In earnings, Adobe Inc. beat on both the top and bottom line as quarterly profit rose 23% year over year. The software maker forecast earnings for the current quarter that were ahead of expectations. 

Ticker Security Last Change Change %
SWBI SMITH & WESSON BRANDS 23.38 -0.19 -0.81%

Gun-maker Smith & Wesson Brands Inc. reported sales soared 67% from a year ago to a record of almost $323 million. The company raised its quarterly dividend by 60% to 8 cents per share and announced a new $50 million share buyback program. 

In commodities, West Texas Intermediate crude oil added 60 cents to $71.64 a barrel. Gold, meanwhile, slid $5.90 to $1,767.90 an ounce. The precious metal plunged $109.50 this week.  

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Overseas markets were under pressure. 

Britain’s FTSE 100 paced the decline in Europe, trading down 1.9%, while Germany’s DAX 30 and France’s CAC 40 fell 1.78% and 1.46%, respectively. 

In Asia, Japan’s Nikkei 225 lost 0.19% and China’s Shanghai Composite slipped 0.01%. Hong Kong’s Hang Seng index outperformed, climbing 0.85%.