(Bloomberg) — U.S. stocks fell in a choppy day of trading as shaky company earnings and the prospect of higher U.S. borrowing costs fueled market jitters. Treasuries gained across the board.
The S&P 500 dropped for a fourth day, trading near its 200-day moving average, a key technical level that the gauge hasn’t closed below since 2020. The tech-heavy Nasdaq 100 led declines, with the more than 20% plunge in shares of streaming giant Netflix Inc. accounting for almost a third of the index’s losses. Bitcoin tumbled in an extended selloff for cryptocurrencies, briefly falling below $38,000 to its lowest level in more than five months.
Volatility that has gripped markets this month has shown little sign of letting up, as the S&P 500 heads for its worst, albeit short, week since October 2020. A buy-the-dip rally on Thursday reversed late in the session, dashing hopes the equity market would show signs of stabilizing. Option expirations of more than $3 trillion are helping add to market turbulence.
“This is the longest short week, I think, in history, right?” Jay Pelosky, founder and president of TPW Investment Management, said on Bloomberg TV. “It’s only been a four-day week and it feels like it’s been two weeks rolled into one.”
The U.S. company reporting season so far has been uneven, highlighting the risk that it may fail to enliven animal spirits in the stock market. While Netflix’s disappointing subscriber outlook sent its shares tumbling, while Peloton Interactive Inc. suggested it was poised to rebound after the darling of the stay-at-home trade was hit by a report of temporary production halts.
Markets are also bracing for rate liftoff by the Federal Reserve. Economists surveyed by Bloomberg expect policy makers to raise interest rates in March for the first time in more than three years and shrink their balance sheet soon after. Geopolitical tensions are also adding to the jitters. A report that Washington is allowing some Baltic states to send U.S.-made weapons to Ukraine stoked concerns about a standoff with Russia.
Read more: Fed Seen Signaling March Liftoff and Assets Runoff Soon After
“There are plenty of risks in the global economy, including geo-political events,” wrote Ethan Harris, head of global economics at Bank of America Global Research. “However, in our view, the biggest near-term risk is right in front of us: that the Fed is seriously behind the curve and has to get serious about fighting inflation.”
Oil was lower on a surprise climb in U.S. crude stockpiles. The White House said it can work to accelerate the release of strategic reserves.
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