FX.co ★ US Premarket on May 10: Investors' poor attitude to risk pushes stock markets down

Futures on US stock indices rose slightly on Tuesday morning after another major sell-off was observed yesterday. Dow Jones Industrial Average futures rose 190 points or 0.6%. Futures on the S&P 500 and Nasdaq 100 managed to compensate for about 0.6% and 1.1%, respectively. The decline in treasury bond yields from multi-year highs slightly helped the stock market regain its position. The yield on benchmark 10-year Treasury bonds, which on Monday reached its highest level since the end of 2018, is about 3.016% at the time of writing.

Following the results of yesterday, the S&P 500 fell below the 4000 level and reached a minimum of 3975.48 - the biggest downward movement since March 2021. The loss was 3.2%. The Dow fell 1.99% and the tech-heavy Nasdaq Composite lost 4.29%.

Several experts expect that a local bottom will be reached in the stock market in the next two weeks, but they are not in a hurry to speak confidently about this, since everyone is counting on more obvious signs of at least some temporary stabilization of risk.

The growth of concerns about inflation has become the main driver of the fall in stock indices. The papers of high-tech companies Meta Platforms and Alphabet suffered the most, which sank by 3.7% and 2.8%, respectively. Tesla shares fell by more than 9%.

Given the risks of even higher inflation and a slowdown in economic growth, which is likely to occur by the end of the 2nd quarter of this year, investors should prepare for further volatility of stocks and difficult times.

Reports from Coinbase, Roblox, RealReal, and Allbirds are expected today.

Premarket

From outsiders:

Peloton securities fell 25.8% in the premarket after the fitness equipment manufacturer reported a larger-than-expected quarterly loss and low revenue.

Novavax shares fell 23% in the premarket after the vaccine manufacturer failed to achieve its goals. Novavax shipped only 31 million doses of the COVID-19 vaccine during the first quarter, although it was projected to ship more than 2 billion for the full year.

Upstart securities fell by 51.2% in the premarket, despite better-than-expected quarterly results. The decline was because the operator of the credit platform based on artificial intelligence reduced its forecast, stating that the current macroeconomic environment is likely to negatively affect the volume of loans.

In the growth leaders:

Vroom surged 38% in premarket trading after the online used car retailer reported smaller-than-expected quarterly losses that beat analysts' estimates.

Biohaven Pharmaceutical, a migraine drug manufacturer, has agreed to be bought by Pfizer in a deal worth $ 11.6 billion, which led to a 72% increase in its shares in the premarket.

AMC Entertainment - shares rose 6.8% in premarket trading after reporting a smaller-than-expected quarterly loss, as well as earnings that beat analysts' forecasts.

As for the technical picture of the S&P500

At this rate of decline, we may return to the lows of 2021 pretty soon. Yesterday's market collapse was stopped only in the support area of $3,977. According to the results of the morning gap, intermediate support of $ 4,015 was formed and the bulls need to think carefully about its protection. This level can be tested during the regular session after the release of comments from representatives of the Federal Reserve System. The protection of $ 4,015 and the growth from this level will strengthen the confidence of traders counting on an upward correction. However, it is still very early to talk about finding the bottom. Fixing above $ 4,048 will open up the possibility of a refund of $ 4,073 and an upgrade of $ 4,116. In case of pessimism and another talk about high inflation and the need to fight it, the bulls will have to defend $ 3,977. Reducing the trading instrument under this level will quickly push it to a minimum of $ 3,914. Having missed this range, it is best to postpone the purchase of a trading instrument to a minimum of $ 3,851.