Wall St set to extend sell-off as Fed tapering inches closer


Fed minutes trigger sell-off

U.S. stock futures plunged on Thursday morning after minutes from the Federal Reserve’s July 28-29 monetary policy meeting confirmed that tapering will start this year.

The minutes showed policymakers discussed when to scale down monthly bond purchases and indicated stimulus easing could begin before the year-end if the economy continued to recover.

“Most participants noted that …it could be appropriate to start reducing the pace of asset purchases this year,” the minutes published Wednesday read.

According to the minutes, policymakers expect economic growth to remain strong in the second of this year, supported by accommodative financial conditions, easing of supply constraints, and further reopening of the economy.

As of 5:30 a.m. ET, futures for the Dow Jones Industrial Average plunged 330 points, or 0.95% to 34,557. S&P 500 futures dipped 39 points, or 0.89% to 4,355.50 while the tech-heavy Nasdaq 100 futures plummeted 113.75 points, or 0.77% to 14,735.50.

Today’s economic calendar features initial jobless claims report at 8:30 a.m. ET and the consensus is for 363,000 new claims for the week ended August 14, a new post-pandemic low.

Robinhood shares sink 10% after earnings report shows massive losses

Shares of Robinhood Markets (NASDAQ: HOOD) were under pressure in pre-market hours Thursday, after the company reported disappointing second-quarter earnings, including a massive $502 million net loss in the three-month period.

The popular trading app said late Wednesday that it had revenue of $565 million in the quarter versus $521.8 million expected by analysts.

Net loss came in at $502 million, or $2.16 per share, within the $487 million to $537 million range the company had projected.

Robinhood attributed the loss to accounting adjustments pertaining to the fluctuating notes and warrants held by the company.

The company also warned shareholders that it expects trading revenues to slow in the current quarter.

As of this writing, Robinhood stock was marked $5.15, or 10.34% to $44.65 per share.

NVidia jumps on strong Q2 earnings

Meanwhile, NVidia (NASDAQ: NVDA) stock was rising before the opening bell, a day after the chipmaker reported better-than-expected second-quarter financial results.

NVidia posted adjusted earnings of $1.04 per share, up from 55 cents a share in the same period last year.

Revenue grew 68% on a year-over-year basis to a record $6.51 billion. Its gaming segment brought in record revenues of $3.05 billion, up 85% from the same quarter a year ago.

Analysts expected the company to report second-quarter earnings of $1.02 per share on revenue of $6.33 billion after the market close.

NVidia shares rose $2.86, or 1.50% to $193.26 each in the pre-market trading session.