(Bloomberg) — Stocks slumped on Friday amid a drop in global technology shares as investors worry about the impact of higher interest rates and the fast-spreading omicron virus variant.
The Nasdaq 100 led a drop in U.S. shares, with tech among the biggest declines in Europe and Asia. Investors also braced for a quarterly rebalancing of the S&P 500 Index after the market close and the expiration of equity derivatives that could magnify market moves.
Central banks globally are prioritizing the fight against elevated inflation by tightening monetary settings, while also keeping a wary eye on the impact of omicron. That backdrop has investors questioning whether global stocks are due for a rougher patch after almost doubling from pandemic lows.
The 10-year Treasury yield slipped and the dollar fluctuated. In Turkey, the lira touched an all-time low. Oil retreated for the first time in three days and European natural gas prices plunged from a record close after Russia in the last minute topped up supplies to the region.
The Federal Reserve, the Bank of England and the European Central Bank showed this week that “they no longer regard the downside risks to economic activity over the coming months as outweighing the need to address inflation pressure,” Adrian Hilton, head of global rates and currency at Columbia Threadneedle Investments, wrote in a note to investors.
Russia raised its key interest rate on Friday and left the door open to further increases. In contrast to the other major central banks, Japan lengthened its cautious withdrawal.
Meanwhile, South Africa delivered some positive news on the omicroncoronavirus variant on Friday, reporting a much lower rate of hospital admissions and signs that the wave of infections may be peaking.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.6% as of 9:31 a.m. New York time
- The Nasdaq 100 fell 0.8%
- The Dow Jones Industrial Average fell 0.6%
- The Stoxx Europe 600 fell 0.9%
- The MSCI World index fell 0.7%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.2% to $1.1307
- The British pound fell 0.3% to $1.3289
- The Japanese yen rose 0.3% to 113.34 per dollar
Bonds
- The yield on 10-year Treasuries declined two basis points to 1.39%
- Germany’s 10-year yield declined three basis points to -0.38%
- Britain’s 10-year yield was little changed at 0.76%
Commodities
- West Texas Intermediate crude fell 1.4% to $71.36 a barrel
- Gold futures rose 0.5% to $1,806.50 an ounce
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
