US stocks look to prolong decline after weak gains hit the tech-heavy Nasdaq and investors await next week’s Fed policy meeting

• US stock markets appear to mark another day of losses on Friday after a brutal technical sell-off.
• Investors eagerly await the Fed’s policy meeting next week for details on its plan to cool inflation.
• The oil price fell by more than 1% and as a result came under considerable pressure from the more gloomy market sentiment.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stock futures faltered Friday after the tech-heavy Nasdaq entered correction territory, as the Federal Reserve’s policy meeting next week continues to weigh on investor sentiment.

Futures on the Dow Jones were roughly flat, while those on the S&P 500 fell 0.1% at 5:20 am ET, signaling a cautious start to trading later in the day.

Nasdaq futures fell 0.4% in premarket trading after tech stocks came under pressure again. Netflix slumped 20% on reporting poor fourth-quarter earnings and missing subscriber estimates.

Weak subscriber growth dragged other streaming peers down, with Roku and Disney dropping 5% and 4% in premarket trading. Tech and other growth stocks are sensitive to expectations of interest rate hikes in the US because they make future earnings less attractive.

“Investors with overexposure to technology may want to consider making some gains on broad gains from the past year and reallocating to sectors and assets that will benefit from cyclical growth,” UBS strategists wrote in a note Friday.

Meanwhile, Peleton stock recovered somewhat, up 8% in premarket trading after falling 23% on Thursday following a report that it is temporarily halting production of its bicycle and treadmill due to dwindling demand.

The S&P 500 is on track for a third consecutive weekly decline for the first time since September 2020, amid nagging concerns about the Fed’s tightening policy to calm rising inflation.

Also weighing on market sentiment were comments from Treasury Secretary Janet Yellen, who said: inflation has risen more than she and other economists had expected. Still, the former Fed chief said she is confident the central bank and the Biden administration will take steps to ease price pressures by 2022.

Legendary investor Jeremy Grantham, who forecast the last three market bubbles, called for a 50% crash for the S&P 500 on Thursday after the fourth “super bubble” burst.

In Asia, regional indices traded lower after US and China losses lowered the benchmark mortgage rate Thursday in an effort to cut borrowing costs.

The Shanghai Composite fell 0.9% and the Hang Seng in Hong Kong was broadly flat. The Nikkei in Tokyo fell 0.9%.

The European markets also fell sharply. The pan-European Euro Stoxx 600 fell 1.4%, while the Frankfurt DAX fell 1.5%.

London’s FTSE 100 fell 0.8% after official data showed UK retail sales fell 3.7% in December, the biggest drop since January last year.

Oil prices traded lower but are still near their highest levels since late 2014. Demand held up better than feared in December despite the spread of the Omicron coronavirus variant, and tensions in Eastern Europe and the Central East is supporting prices on fears of new supply disruptions, according to UBS.

Brent crude futures fell 1.78% to $86.81 a barrel, and West Texas Intermediate fell 1.79% to $84.05 a barrel.

“The fall in prices was caused by a generally more gloomy sentiment, which was also reflected in markedly declining stock markets,” said Commerzbank’s Carsten Fritsch.

Bitcoin fell 6% to $39,133 alongside broader cryptocurrency losses as risk aversion spread across financial markets. The downturn followed Russia calling for a sweeping ban on cryptocurrency activities.

Read more: Goldman Sachs Lists 9 Reasons Why U.S. Stocks Are Poised to Resume Record Run Despite Historically High Valuations – Shares the 4 Most Convincing Trades for 2022