Wall St eyes muted open as Fed, Ukraine worries linger

U.S. stocks were set for a subdued open on Thursday, with growth stocks remaining under pressure after a sharp selloff this week on concerns around a more hawkish Federal Reserve and a setback to the Ukraine peace talks.

The tech-heavy Nasdaq shed nearly 4.5% over the past two sessions after comments from U.S. central bank policymakers and minutes from the Fed’s March meeting suggested a rapid removal of stimulus measures put in place during the pandemic.

Minutes released on Wednesday showed that Fed officials “generally agreed” to cut up to $95 billion a month from the central bank’s asset holdings even as the war in Ukraine tempered the first U.S. interest rate increase since 2018.

Megacap growth shares, hit by multi-year high bond yields, were mixed premarket. Apple Inc (NASDAQ:AAPL) slipped 0.3%, while Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) edged higher.

Futures pared much of their early gains after Russian Foreign Minister Sergei Lavrov said Ukraine had presented Moscow with a draft peace deal that contained “unacceptable” elements.

“The market is cautious. The employment situation is strong but we know that borrowing costs are rising for corporations. We know that consumers are being squeezed with higher energy prices,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.

“If you look at the leadership, stocks like Coca Cola, and Pepsi, have been the big winners recently. They’ll probably continue to be as people remain cautious.”

Data showed the number of Americans filing new claims for unemployment benefits fell last week, indicating a further tightening of labor market conditions heading into the second quarter, which could contribute to keeping inflation elevated.

At 08:52 a.m. ET, Dow e-minis were down 62 points, or 0.18%, S&P 500 e-minis were down 2.25 points, or 0.05%, and Nasdaq 100 e-minis were down 0.5 points, or flat.

Tesla (NASDAQ:TSLA) Inc rose 0.8% after the Biden administration said senior officials held a meeting with major automotive leaders to discuss electric vehicles and charging.

HP Inc (NYSE:HPQ) jumped 11.2% after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) Inc disclosed that it had purchased nearly 121 million shares of the personal computing and printing company.

Levi Strauss & Co (NYSE:LEVI) gained 2% after its quarterly results beat Wall Street estimates, helped by price increases and strong demand for its jeans, tops and jackets.