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Walgreens Boots Alliance (NASDAQ:WBA) slid 7.1% in premarket trading as it cut its fiscal year profit forecast on lower demand for COVID-19 tests and vaccines as well as lower consumer spending.
However, gains in megacap stocks such Amazon (NASDAQ:AMZN), Tesla (NASDAQ:TSLA) and Nvidia (NASDAQ:NVDA) supported market sentiment.
Market participants are focusing on economic data and the European Central Bank Forum in Sintra, Portugal where several key policymakers including Fed Chair Jerome Powell will speak this week.
“We are still seeing the markets adjusting to the growing acceptance that central banks, the Fed included, may not be cutting interest rates this year and that further hikes are coming,” said Stuart Cole, chief macro economist at Equiti.
“Specifically for the U.S., it raises questions about whether or not the Fed can achieve a soft landing.”
Monthly durable goods, new home sales and consumer confidence data, due later in the day, could show if the U.S. economy is stressed following the Fed’s aggressive rate hikes.
Hawkish comments from Powell last week halted a winning run on Wall Street, with market-leading growth and technology stocks among the biggest drags.
Traders have baked in a 76.9% chance the Fed will raise interest rates by 25 bps to 5.25%-5.50% range at its July meeting, according to CME Group’s (NASDAQ:CME) Fedwatch tool.
Despite the recent weakness, the main U.S. stock indexes are set to record second-quarter gains, powered by a rally in growth stocks, upbeat earnings reports and hopes that the Fed will soon end its monetary tightening campaign.
At 7:27 a.m. ET, Dow e-minis were down 18 points, or 0.05%, S&P 500 e-minis were up 6.75 points, or 0.15%, and Nasdaq 100 e-minis were up 58 points, or 0.39%.
Snowflake climbed 3.5% after the cloud data analytics company announced partnership with Nvidia to allow customers to build AI models using their own data.
U.S.-listed shares of Chinese firms such as Alibaba (NYSE:BABA) Group and JD (NASDAQ:JD).com rose nearly % after Chinese Premier Li Qiang announced stimulus plans and said economic growth in the second quarter will be higher than the first.
Google-parent Alphabet (NASDAQ:GOOGL) slipped 0.7% after Bernstein downgraded the stock to “market perform.”
Lordstown Motors slumped 64.2% as the U.S. electric truck manufacturer filed for bankruptcy protection and put itself up for sale after it failed to resolve a dispute over a promised investment from Foxconn.
