Wall Street stock market futures fell on Friday amid fears that accelerating inflation in the face of a strong US economy could prompt the Federal Reserve to keep monetary policy tight for the rest of the year.
Economic data throughout the week signaled that although inflation picked up in January, a strong job market and resilience in consumer spending could offer the Fed more room to raise borrowing costs.
Goldman Sachs said it expects the Fed to raise rates three more times this year and by a quarter of a percentage point each, while currency markets are pricing in a terminal rate of 5.3% by July.
All three major indexes posted their worst annual losses in 2022 since the 2008 financial crisis, hit by the Fed's fastest monetary tightening in four decades.
In January, hopes that the central bank may be nearing the end of its rate-hike cycle fueled renewed interest in weak growth stocks.
However, by mid-February, the index could barely match the confidence seen in January, with the blue-chip Dow Jones could record 1%, due to market expectations of the Fed to remain hawkish throughout the year.
Traders will look to comments by central bank officials including Richmond Fed President Thomas Barkin and Governor Michelle Bowman on Friday to gauge the tone of the Fed's monetary policy going forward.
Moderna Inc fell 6.3% in premarket trading after the drugmaker said its experimental messenger RNA-based influenza vaccine failed to show it was at least as effective as the approved vaccine against the less common influenza B.
Manchester United rose 4.4% after posting a record close in the previous session. The Telegraph reported on Thursday that Saudi Arabia had submitted a bid for the British football club before Friday's deadline.
DoorDash Inc rose 6.2% after the food delivery company said it would buy back $750 million worth of stock and projected a key profit measure that topped Wall Street estimates.
