All 11 major sectors of the S&P 500 fell. Healthcare stocks lost the most after a lackluster earnings forecast for HCA Healthcare sent its shares down 16.7%.
Hospital operators such as Tenet Healthcare, Community Health Systems and Universal Health Services lost between 10.4% and 13.2%.
Meanwhile, concerns about the risks of rate hikes continued to weigh on mega-cap growth stocks, especially after Federal Reserve Chairman Jerome Powell on Thursday favored moving more quickly to fight inflation and said a 50 basis point increase would be “on the table” at the May meeting.
Powell’s words triggered a sell-off of Meta Platforms Inc and Amazon.com Inc, already reeling from dismal results from streaming giant Netflix earlier in the week.
“If we see yields continue to rise, it will be a depressant for growth stocks,” said Peter Cardillo of Spartan Capital Securities. “The market fears that the Fed will overdo the fear of inflation and cause a downturn in corporate earnings in the future.”
Alphabet Inc, Apple and Amazon.com Inc fell another 1% to 2%, adding to this week’s heavy losses. All three major indices were on track to end the week lower.
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Global stocks hit five-week lows and bond yields soared to multi-year highs on Friday as investors braced for interest rate hikes in the United States, Britain and the euro zone.
Meanwhile, the yuan depreciated to a nine-month low as lockdowns in Shanghai weighed on China’s growth prospects.
European Central Bank officials said on Thursday that rates in the euro zone could start to rise in July, while the Bank of England’s Catherine Mann said the cost of borrowing is likely to rise further.
“The Fed, the ECB and the Bank of England have made aggressive comments in the markets and they have reacted,” said Monica Defend, director of the Amundi Institute, although she added that “for the euro zone we are more skeptical about the fragility of the economic cycle And there is great potential for recession in Germany and Italy.”
Source: Ambito
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