Stock Market Today - 5/2: Stocks Mixed, Tech Slides With Fed, Earnings, and Jobs Data In Focus

Stock Market Today - 5/2: Stocks Mixed, Tech Slides With Fed, Earnings, and Jobs Data In Focus ...

Following the biggest single-session decrease in over two years Friday, stock markets looked to add some weakened technical names heading into an active week on Wall Street, highlighted by the Federal Reserve''s interest rate decision on Wednesday.

The US stock market is off to their worst four-month start to any year since 1939, with the S&P 500 falling by 13.3%. The Nasdaq, meanwhile, suffered its largest monthly drop since the 2008 global financial crisis, largely due to a jump in bond yields linked to the Fed''s hawkish policy turn.

"We have not seen capitulation yet, and while nobody can time these things perfectly, I anticipate further market weakness," said David Bahnsen, a wealth management company established in Newport Beach, Calif., has $3.6 billion under management.

"It''s always best to focus on the quality of a portfolio''s holdings when a market tops, during the inevitable correction, and after the correction closes," said the manager. "It''s never a good idea to blame quality for a short run of unsustainable performance."

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As central banks tighten their policies amid rising inflation pressures, supply chains remain overwhelmed by Covid disruptions, and China struggles to manage its recent epidemic resurgence, economic activity statistics from around the world continue to indicate a pullback.

According to a private survey, manufacturing activity in China was at a two-year low last month, whereas in Europe, an important output index was hit at the lowest levels in 15 months as raw materials prices and labor costs increased.

Those readings, as well as a rising US dollar, have pushed oil markets forward. WTI futures for June delivery fell to $2.75 per barrel, and Brent contracts for July fell to $2.52 per barrel.

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Pfizer''s stock falls as data from the Covid Antiviral Trial fails to disclose anticipated earnings ahead of the fourth quarter.

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In Europe, the Stoxx 600 was 1% lower in mid-day Frankfurt trading, with many regional markets closed for the traditional May Day workers holiday, while overnight in Asia, a rebound in China equities failed to provide a more broad session gain for the region-wide MSCI ex-Japan index, which was 0.2 percent lower before trading closing.

The initial estimate of GDP growth last week, which demonstrates a 1.4% decrease in the first three months of the year, added to concerns that the Fed''s tightening efforts will snuff-out growth in the world''s largest economy, but hasn''t, as yet, altered bets on either this week''s decision nor the possibility of even higher rates heading into the summer months.

This is not only the first quarterly GDP contraction since the epidemic, but also a mild first quarter earnings season, which suggests collective S&P 500 profits will only increase 4.4 percent once the energy sector was stripped-out, compared to 0.6 percent in the second quarter.

This week, around 160 businesses will report: Clorox CLX, Pfizer (PFE) - Get Starbucks Corporation Reportand CVS Health (CVS) - Get CVS Health Corporation Report, with markets also focused on jobs data with the JOLTS survey on Tuesday, ADP''s National Employment Report Wednesday, and the April non-farm payroll report on Friday.

FedWatch, a subsidiary of CME Group, is pricing in a 99.8% chance of a 50 basis point rise on Wednesday, as well as a 95.6% chance of a 75 basis point increase at the Fed''s following its meeting in June.

Futures connected to the Dow Jones Industrial Average have indicating a modest 30 point opening bell gain, while those linked to the S&P 500 are priced for a three point drop. Futures linked to the Nasdaq have a modest 15 point opening bell decline.

Pfizer''s stock was active in pre-market trading, falling 5.5 percent after the manufacturer published disappointing late-stage data from a Covid antiviral medication, Paxlovid, late Friday, ahead of its first quarter earnings later this week.

Reportshares, meanwhile, jumped 2.55% after Warren Buffett''s announcement that his Berkshire Hathaway investment firm has raised a 9.5% stake in the video-game maker ahead of its $69 billion acquisition by Microsoft (MSFT) - Get Microsoft Corporation Report.

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