Stocks in Europe dropped along with U.S. futures as disappointing reports from technology bellwethers marred sentiment at the end of a tumultuous week. Treasuries gained with the dollar before the release of key data on economic growth and consumer prices in the world’s biggest economy.
Thursday’s gains proved a brief respite as the Stoxx Europe 600 Index headed for the lowest in almost two years. Asian shares sank deeper into a bear market, with Japanese stocks sliding more than 5 percent this week. Equities in Hong Kong and China also fell, while losses were greatest in South Korea. Downbeat results from Amazon.com Inc. and Alphabet Inc. weighed on S&P 500 index futures after the underlying gauge had climbed for the first time in seven days Thursday on earnings from Twitter, Microsoft and Tesla. Core European bonds gained and gold rose as the risk-off mood spread.
“You’re going to see a lot more volatility,” Con Michalakis, chief investment officer at Statewide Super, told Bloomberg TV in Sydney. “It’s going to be a feature of this environment.”
Markets remain on edge after more than $6.7 trillion was lost from global equities’ value since late September, as lofty expectations for earnings were tested amid heightened trade tensions and tightening financial conditions. The focus now turns to U.S. GDP, consumer-price and consumption data later Friday amid debate about the Federal Reserve’s policy path.
The central bank’s newly installed No. 2 official backed plans for some further gradual interest-rate increases and suggested policy makers won’t change course in response to political pressure or recent stock market jitters. The Fed “as near as it has been in a decade” to meeting its goals of full employment and price stability, Vice Chair Richard Clarida said Thursday.
Elsewhere, West Texas oil dipped back below $67 a barrel and copper headed to close the week lower. The offshore yuan extended this week’s slide to trade at the weakest since January 2017, while the yen pushed higher. Emerging-market stocks tumbled to the lowest in 19 months, heading for a fifth straight week of losses.