Stock futures drop and bond yields climb following hawkish comments by Fed’s Powell

The Nasdaq Composite 
COMP,
-2.07%
 lost 2.1%, finishing at 13,174.65 after trading as high as 13,710.70 in early action.

What’s driving the markets?

The S&P 500 was set to end the week barely higher, with the Dow industrials looking at a gain of nearly 1%, while the Nasdaq was poised for a fall of more than 1%, which would mark its third-straight weekly loss.

Investors were bracing for follow-up from Thursday’s selloff session that intensified into the afternoon after the Fed’s Powell added his support for moving faster on raising interest rates to cool inflation, measures that would include a possible 50 basis point hike in May.

The benchmark 10-year Treasury yield 
TMUBMUSD10Y,
2.942%
rose another three basis points to 2.944%, after climbing about 8.1 basis points to 2.917% on Thursday, the highest since Dec. 4, 2018.

Read: How to invest as inflation, higher interest rates and war roil markets

And some are warning that the Nasdaq is looking particularly vulnerable. The week has delivered some big earnings news for the tech sector, with investors cheering Thursday’s results from Tesla
TSLA,
+3.23%,
on the heels of deeply disappointing Netflix
NFLX,
-3.52%
results.

“The technical situation looks suddenly far more bearish today [Friday] for equities after yesterday’s powerful selloff, which took the Nasdaq-100 below the prior pivot low, possibly opening up for a run into the ultimate pivot low just below 13,000 from early March,” said strategists at Saxo Bank in a note.

“The broader S&P 500 index has yet to capitulate below recent lows but did see a dramatic rejection of the attempt to trade above the 200-day moving average yesterday,” they said.

And next week will mark another big week for earnings, with 558 companies reporting, Saxo noted. “It is the big test of companies’ ability to pass on costs to their customers,” they said.

The big names on their list to watch? Microsoft Corp.
MSFT,
-1.94%,
Alphabet Inc.
GOOGL,
-2.52%,
UPS Inc.
UPS,
-0.86%,
Meta Platforms Inc.
FB,
-6.16%,
Qualcomm Inc.
QCOM,
-3.01%,
Boeing Co.
BA,
-1.38%,
PayPal Holdings Inc.
PYPL,
-5.80%,
Apple Inc.
AAPL,
-0.48%,
Amazon.com Inc.
AMZN,
-3.70%,
Mastercard Inc.
MA,
-0.20%,
Intel Corp.
INTC,
-1.27%,
Caterpillar Inc.
CAT,
-1.07%,
Exxon Mobil Corp.
XOM,
-1.06%,
and Chevron Corp.
CVX,
-4.61%.

Oil prices were also under pressure, with U.S. crude
CL00,
-1.82%

CL.1,
-1.82%
down 1.5% to $102.22 a barrel, and international benchmark Brent crude
BRN00,
-1.72%
off 1.4% to $106.47 a barrel.

How are other assets trading?

• The ICE U.S. Dollar Index 
  DXY,
  +0.44%
   rose 0.4%, with the British pound
  GBPUSD,
  -1.15%
  down about 1.2% against the dollar after weak data.

• Bitcoin 
  BTCUSD,
  -0.57%
  fell 3.5% to $40,060.

• The Stoxx Europe 600
  SXXP,
  -1.35%
  dropped 1.3% while London’s FTSE 100 
  UKX,
  -0.79%
  fell 0.8%.

• The Shanghai Composite 
  SHCOMP,
  +0.23%
   rose 0.2%, while the Hang Seng Index 
  HSI,
  -0.21%
  slipped 0.2% in Hong Kong and Japan’s Nikkei 225 
  NIK,
  -1.63%
  fell 1%.