U.S. equity markets were pressured Friday as the Federal Reserve signaled rate hikes could come as early as next year.
|I:DJI||DOW JONES AVERAGES||35061.55||+238.20||+0.68%|
|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.
Growth stocks including Tesla Inc. and Square Inc., which typically benefit from lower interest rates, outperformed.
|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.
|MU||MICRON TECHNOLOGY, INC.||75.94||+0.41||+0.54%|
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.
|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.
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.
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.
|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.
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%.