ASX is set for a flat start after a rocky Wall Street session

But critics say many of these areas also tend to be among the last to feel the impact of higher interest rates and may yet rupture. And the Fed has already hiked rates at the most aggressive pace in decades.

“Fed tightening always breaks something,” wrote investment strategist Michael Hartnett in a report by BofA Global Research.

Complicating things are all the overhauls and methodological changes embedded in recent data reports on the economy that could cloud the signal they’re giving, said Michael Green, chief strategist at Simplify Asset Management.

He’s also concerned about how much of the high inflation gripping the economy is the result of reduced competition as companies across all industries consolidate, something that rate hikes alone can’t solve.

“We created a feedback loop where the Fed hikes rates until they break something,” Green said. “Then the question becomes: How do they react?”

Big tech and other high-growth companies have borne the brunt of Fed concerns because they are seen as the most vulnerable to higher interest rates. Their holdings rose in previous years in part due to record-low prices.

Microsoft fell 1.6 percent and Nvidia lost 2.8 percent for some of the heaviest weights in the S&P 500.

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Energy stocks also fell as oil prices fell. Exxon Mobil fell 3.8 percent.

On the positive side was Deere, which rose 7.5 percent after reporting stronger earnings than analysts had expected for its most recent quarter.

Overall, the S&P 500 fell 11.32 points to 4,079.09. The Dow rose 129.84 to 33,826.69 and the Nasdaq fell 68.56 to 11,787.27.

Hong Kong’s Hang Seng fell 1.3 percent on overseas stock markets. The losses were compounded by news that Bao Fan, a key dealmaker in the tech industry, appears to have disappeared.

Shares of one of China’s top investment banks, China Renaissance, tumbled on Friday after the company said in a filing on the Hong Kong Stock Exchange that it had lost contact with Bao, its founder. Bao’s disappearance follows a crackdown on tech companies over the past two years that officials in China said was complete.

AP

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