S&P 500 slides more than 1.5% to fresh weekly lows around 4,320 with central bank tightening in focus

• Major US equity indices looked set to end the week on the back foot and at lows on Friday.
• Traders cited concerns about global monetary tightening from major central banks as weighing on sentiment.
• The S&P 500 slumped over 1.5% to near 4,320.

Major US equity bourses tumbled for a second successive session on Friday and look on course to close out the week at fresh monthly lows, with traders citing hawkish remarks from Fed, ECB and BoE officials this week as continuing to weigh on sentiment. Recently released and weaker than expected flash US Service PMI results probably also aren't helping sentiment. The S&P 500 was last trading down about 1.7% and near the 4,320 level, taking its run of losses since Thursday’s highs above 4,500 to nearly 4.5%.

The index was last on course to post a third successive weekly loss of about 1.7% and has now convincingly relinquished its grip on the 50-Day Moving Average, which resides just above 4,400 and earlier weekly lows in the 4,370 area. The bears will now inevitably be eyeing a return to sub-4,200 annual lows, given the lack of notable support levels in the interim.

In terms of the other major US indices, the Nasdaq 100 was holding up a tad better and last trading down about 1.2% on the day but still above 13,500, amid some stabilisation in long-term yields. On the week, however, the massive jump in long-term yields has put the tech/growth stock heavy index under heavy selling pressure and the Nasdaq 100 looks on course to end the week about 2.5% lower, a third week of losses in a row.

Turning to the Dow, the index is currently the worst performer of the major US indices on the day having lost about 1.7% to fall from its 21DMA near 34,700 to under its 50DMA at 34,250. But on the week, it has held up better than its peers. Nonetheless, the index is still on course to post a negative weekly close (down about 0.75%), which would mark a fourth successive weekly loss.

Dow underperformance on the final day of the week can in part be explained by underperformance in the health care sector (which is heavily represented in the index) after hospital operator HCA Healthcare issued downbeat profit forecasts and tumbled over 15% as a result, weighing on the entire sector. But this goes against the general tone to earnings so far this season.

According to Refinitiv data cited by Reuters, of the 99 companies to have posted earnings so far, 77.8% have beaten analyst forecasts, above the long-term 66% average beat rate. Focus will remain on earnings next week and whether decent numbers could give the beaten-up market some reason to cheer. Mega cap companies like Microsoft, Amazon, Apple, Boeing, Ford and Exxon Mobil will all be reporting.