Investing.com-- The S&P 500 slipped to a second-weekly loss Friday, as tech was pressured by rising Treasury yields on jitters the Federal Reserve is likely to stress the need for interest rates to remain higher for longer following data showing inflation continues to run hot.
At 16:00 ET (20:00 GMT), S&P 500 index fell 0.6%, NASDAQ Composite fell 1% and Dow Jones Industrial Average dropped 190 points, or 0.5%.
Treasury yields rise ahead of Fed meeting
Treasury yields added to recent gains as bets on sooner Fed rate cuts suffered a blow from recent data showing a faster-than-expected pace of inflation at time when the consumer strength appears to be waning.
The University of Michigan’s consumer sentiment index fell to a reading of 76.5 from 76.9 in February, according to preliminary results, missing economists estimates of 77.4.
About 55% of traders expect a June rate cut, slightly down from 58% last week.
As the Fed is widely expected to keep interest rates unchanged on Mar. 20, the central bank’s outlook on the economy and the interest rate path ahead will garner the bulk of investor attention.
Tech cools on rising yields; Adobe slumps on weak guidance; Micron shrugs off selloff
Big tech was in the firing line, dragging the broader market lower, as rising Treasury yields weighed on growth sectors of the market.
As well as a stumble in big tech, a nearly 14% slump in Adobe Systems (NASDAQ:ADBE) also weighed on sentiment after the software maker reported weaker-than-expected second quarter revenue guidance on higher competition and weak demand for its AI offerings.
For fiscal Q2, the company guided digital media net new annual recurring revenue, a key metric, of $440 million, missing analyst estimates of about $460 million. The weaker guidance is "raising questions about potential secular pressures in Adobe’s core business," UBS said, after cutting its price on the stock to $540 from $600.
Micron Technology Inc (NASDAQ:MU), however, shrugged off the broader market selloff after Citi named Micron one of its top picks and hiked its price target on the stock by $150 from $95 as the memory chip maker increased exposure to artificial intelligence is expected to boost growth.
Ulta Beaty in ugly fall following weaker guidance; Fisker downplays bankruptcy talks
Ulta Beauty (NASDAQ:ULTA) dropped 5% after the chain of beauty stores forecast full-year profit below Wall Street estimates as elevated supply-chain costs and increased promotions hurt its margins.
Fisker Inc (NYSE:FSR), meanwhile, rose more than 12% after the electric vehicle maker said it seeking to raise capital to strengthen its balance sheet, downplaying reports of a possible bankruptcy filing.
Crypto stocks in U-turn as Bitcoin moves off lows
Crypto stocks such as MicroStrategy Incorporated (NASDAQ:MSTR), Marathon Digital (NASDAQ:MARA) and Coinbase Global (NASDAQ:COIN) cut losses to trade higher Bitcoin, which down more than 10% earlier, moved off session lows.
The dip-buying in bitcoin comes just ahead of its eagerly awaited halving event that will cut rate of new bitcoin generated in half, likely increasing the scarcity premium in the popular crypto.
(Peter Nurse, Ambar Warrick contributed to this article.)