Contracts on the Nasdaq 100 jumped 0.7%, climbing twice as fast as futures on the S&P 500 Index. In premarket New York trading, Google parent Alphabet Inc. rose after revealing a plan to cut 12,000 jobs. Netflix jumped after reporting stronger-than-expected subscriber numbers. A weaker Japanese yen contributed the most to the greenback’s gain.

Treasuries dropped as investors weighed comments by US and European central bankers favouring higher interest rates. Oil climbed on hopes for Chinese demand. T-Mobile US tumbled in early trading after saying a hacker stole data pertaining to 37 million customer accounts. Eli Lilly & Co fell as its bid for accelerated approval of its Alzheimer’s therapy was rejected. 

This week’s economic data pointed to an increased possibility of a US recession and global slowdown, but that didn’t deter Federal Reserve or European Central Bank officials from reiterating their hawkish stance. With 10% of S&P 500 companies having reported the latest quarterly earnings, initial trends suggest a rapid deterioration in profitability, helping to erase about $700-billion of equity value in the past two days alone.

“The Fed is not stepping back from its rate hike talk despite easing inflation and easing activity,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note. “Major banks and institutions agree that the US is faced with a mild recession.” 

On Thursday, Fed vice chair Lael Brainard, considered a dove, said rates would need to stay elevated for a period to further cool inflation. Her comments came a day after St. Louis Fed President James Bullard pencilled in a forecast for a target-rates range of 5.25% to 5.5% by the end of this year. The current range is 4.25% to 4.5%. 

Adding to the sombre mood in the US, the federal debt limit was hit and the Treasury Department began the use of special measures to avoid defaulting on any payments. The dollar headed for its first weekly gain in more than a month.

The nascent earnings-reporting season has brought concern that higher interest rates are already impacting the economy and corporate performance. Of the 55 S&P 500 companies that have reported results so far, only two-thirds have beaten analysts’ estimates, compared with the 80% positive surprise seen over the past several quarters.

Alphabet added 3.8% in early New York trading as it planned to cut 6% of its global workforce amid a wave of retrenchment across Silicon Valley. Netflix jumped 6.9% as analysts noted the company’s new ad-supported tier and the quality of its original content helped drive subscriber additions.

T-Mobile lost 1.4%. The company said there may be “significant expenses” incurred in connection with the incident, but doesn’t expect it will have a material effect on operations. Eli Lilly fell 2.3% after the Food and Drug Administration denied it accelerated approval for Donanemab because not enough patients on the trial had received the drug for a full 12 months. 

Europe’s benchmark Stoxx 600 index steadied from Thursday’s biggest slump in a month, as retail and industrial-goods stocks rose.

Oil contracts rose for a second day, with West Texas Intermediate crude heading for a weekly advance. Traders were emboldened by Chinese demand that’s been picking up after the nation abandoned harsh virus restrictions.

Copper held on to its fifth weekly increase in London, its best run since May 2021, with global supply risks persisting and inventories near historic lows. BM/DM