Stocks Boosted by China Tech; U.S. Futures Retreat: Markets Wrap

Hong Kong tech gauge surges on hopes for easing crackdown
After-hours drops in Amazon, Apple clouded Wall Street rally

Asian shares pushed higher Friday on a jump in Chinese technology stocks, while U.S. equity futures fell after post-earnings slumps in Amazon.com Inc. and Apple Inc.

Speculation of a possible near-term easing in China’s crackdown on internet companies spurred a surge of about 10% in the Hang Seng Tech Index. China vowed to support the health of so-called platform firms.

There were also signs of progress toward tackling the threat of delisting from the U.S. that hangs over some Chinese companies. Meanwhile, officials urged efforts to meet growth targets as lockdowns hamper the nation’s economy.

European futures were in the green. But contracts on the S&P 500 and technology-heavy Nasdaq 100 retreated after Amazon projected sluggish sales growth and Apple flagged supply constraints. Both slid in extended trading Thursday, clouding the S&P 500’s best climb since early March.

Volatility in the currency markets moderated compared with the upheavals of a day earlier. The yen pared a tumble while staying near 20-year lows. The dollar was set for its best week since 2021 amid investor caution and as the Federal Reserve readies sharp interest-rate hikes to slow inflation.

Oil was near $105 a barrel. Traders are evaluating the prospect of a European Union ban on Russian crude in retaliation for the invasion of Ukraine.

Markets continue to be whipsawed by the corporate earnings outlook, tightening U.S. monetary policy, the war in Ukraine and China’s Covid outbreak. All those factors herald more challenges for investors.

“The Fed’s record on soft landings is not that strong,” Carol Schleif, deputy chief investment officer at BMO Family Office LLC, said on Bloomberg Television. “Markets are watching very, very carefully to see if we can thread that needle.”

The latest U.S. data showed that the world’s largest economy unexpectedly shrank for the first time since 2020. That reflected an import surge tied to solid consumer demand, suggesting growth will return imminently.

U.S. Outlook

The figures underscore the debate about how much scope the U.S. central bank has to tighten policy before the economy cracks. Markets continue to project a half-point Fed rate hike next week.

“A year from now, 10-year yields are most likely going to be lower than where we are today,” Jimmy Chang, chief investment officer at Rockefeller Financial LLC, said on Bloomberg Television, referring to Treasuries. “I do believe at some point the economy starts to weaken, the Fed will be less hawkish, perhaps even go into a pause mode by, say, early next year.”

Treasuries were steady Thursday, leaving the 10-year U.S. yield at 2.82%. Treasury futures edged up. There’s no cash trading due to a Japan holiday.

Elsewhere, Elon Musk sold about $4 billion worth of Tesla Inc. shares after announcing a blockbuster $44 billion deal to buy Twitter Inc. Musk tweeted that he has “no further Tesla sales planned after today.”