US stock futures fall amid hawkish Fedspeak, Netflix sinks on weak outlook

Investing.com-- U.S. stock index futures fell in evening deals on Thursday as hawkish comments from Federal Reserve officials furthered concerns over higher-for-longer interest rates, while tech major Netflix (NASDAQ:NFLX) fell sharply as weak guidance overshadowed a strong earnings report.  

Several Fed officials warned this week that sticky inflation will give the central bank little impetus to begin cutting interest rates early in 2024. Their comments came amid sustained signs of economic strength in the U.S., which also gives the Fed more headroom to keep rates higher. 

Netflix fell nearly 5% in aftermarket trade after the video streaming giant’s second-quarter revenue outlook missed estimates, largely overshadowing a bumper first-quarter report. The firm's middling outlook raised concerns that slowing consumer spending could weigh on corporate earnings in the coming months, especially for major technology firms.

S&P 500 Futures fell 0.2% to 5,039.0 points, while Nasdaq 100 Futures fell 0.4% to 17,484.75 points by 20:09 ET (00:09 GMT). Dow Jones Futures fell 0.2% to 37,950.0 points. 

Hawkish Fed signals continue, Bostic warns of rate hike

A slew of Fed officials, including Chair Jerome Powell, warned this week that rates were set to remain higher for longer in the face of sticky inflation.

Atlanta Fed President Raphael Bostic went as far as to say that the Fed could even hike interest rates this year if inflation did not ease as expected, although he still expected a single rate cut in 2024. 

Bostic’s comments rattled an already fragile market, which was reeling from investors sharply pricing out their expectations for a June rate cut.

The S&P 500 fell 0.2% to finish at 5,011.12 points on Thursday, logging its worst losing streak since October. The NASDAQ Composite fell 0.5% to 15,601.50 points, while the Dow Jones Industrial Average closed marginally higher at 37,775.38 points. 

Chip rout continues as TSMC strikes cautious note

Losses in chipmaking stocks extended into aftermarket trade on Thursday, following somewhat middling earnings and forecasts from industry stalwarts TSM (NYSE:TSM) and ASML Holding NV (NASDAQ:ASML).

TSMC- the world’s biggest contract chipmaker- fell 0.8% in aftermarket trade, extending a nearly 5% decline from during the session. While the firm clocked better-than-expected earnings and flagged strong future growth on demand from the artificial intelligence industry, it sounded less optimistic about the overall semiconductor market, especially in the face of weak demand for smartphones and personal computers.

TSMC’s earnings came a day after chipmaking technology maker ASML (AS:ASML) clocked weaker-than-expected first-quarter earnings. Both firms are considered as bellwethers for the chip industry.

This spurred sharp losses in other U.S. chipmakers, which were vulnerable to profit-taking after marking heady gains so far this year. Market darling NVIDIA Corporation (NASDAQ:NVDA) fell 0.6% in aftermarket trade after tumbling nearly 4% on Wednesday. 

Q1 earnings continue with P&G, American Express on tap

The first-quarter earnings season is set to pick up pace in the coming days, with reports from Procter&Gamble Company (NYSE:PG) and American Express Company (NYSE:AXP) due on Friday.

Next week, market giants including Tesla Inc (NASDAQ:TSLA), General Electric Company (NYSE:GE) and Meta Platforms Inc (NASDAQ:META) are set to report earnings by Wednesday.