Market Snapshot: U.S. stock futures mixed after two days of Fed-inspired losses

The S&P 500 closed below its 200-day average and is down 6% on the year.

What’s driving markets

Minutes from the last Federal Open Market Committee meeting, released Wednesday, showed the central bank weighing a plan to reduce its bond holdings by $95 billion per month as it tries to stamp out surging inflation. The Fed’s caution hit tech stocks in particular on Wednesday.

“It’s not surprising to see that growth names are leading the losses, given the well-known rate sensitivity of these megacap stocks, with the Nasdaq now almost 5% off recent highs,” said Michael Brown, head of market intelligence at Caxton. “While, near-term, I remain cautious on equities, I also think that these names are likely to outperform over the medium-term as economic activity slows and the market places a premium on growth.”

Rates analysts at Bank of America say the 10-year yield TMUBMUSD10Y, 2.575% could reach 3%, even though they see fair value in the 2.05% to 2.7% range.

“Risks of a decoupling of 10yT to this fundamental range increase, given: (1) the market prices a higher probability of a reset of longer term inflation expectations and implicitly of the neutral rate view; and (2) a challenging supply/demand backdrop that exacerbates near-term bearish dynamics and increases the potential for overshoots vs. fundamentals,” said the BofA analysts led by Bruno Braizinha.

The economics calendar features releases on jobless claims and consumer credit. St. Louis Fed President James Bullard, who has called for the fed funds rate to climb above 3% this year, is due to speak.

Market attention also will be on HP HPQ, -3.03%, after Warren Buffett’s Berkshire Hathaway BRK.B, -0.03% disclosed that it had taken an 11% stake in the maker of personal computers.