US Stock Indexes Open Lower; Deere Beats on Top and Bottom Lines

A look as the day ahead in the United States has investors once again worried about hot inflation and rising interest rates. However, there is also the renewed debate about whether the Federal Reserve’s aggressive tactics will trigger a recession with some saying the strong economy will lead to a soft-landing while others believe the U.S. is facing tough times ahead.

Fed to Stay Aggressive

On Thursday, two Fed officials said the central bank probably should have lifted rates more than it did early this month and warned more hikes were now essential to get inflation back to target.

These comments were followed by a fresh assessment of Fed policy by a major bank. Goldman Sachs said it now expects three more quarter-point rate hikes this year – in March, May, and June – to peak target range of 5.25%-5.5%. Bond manager PIMCO also sees the Fed changing its projections to show that as the new high.

Earnings Take Backseat to Interest Rate Hike, Recession Worries

While investors are worrying about inflation, higher rates and possibly a recession, there were new earnings releases on Friday, however, they haven’t had much of an impact on the early price action in the broad-based indexes. Nonetheless, some are still making headlines.

Shares of Deere & Company are up 3% ahead of the cash market opening after the company exceeded expectations on the top and bottom lines in its latest quarter. The agricultural machinery maker reported per-share earnings of $6.55 on revenue of $11.4 billion. That was greater than $5.57 per share profit forecasted by analysts polled by Refinitiv, and the consensus revenue estimate of $11.28 billion.

Online food delivery company DoorDash gained more than 5% after posting fourth-quarter revenue of $1.82 billion, topping analyst expectations of $1.77 billion, per Refinitiv. DoorDash also said it will buy back up to $750 million shares. However, the company reported a wider-than-expected loss.

DraftKings is a big winner in the premarket session with the sports betting company posting fourth-quarter results that beat expectations. The company reported a loss of 53 cents per share on revenue of $855 million. Analysts polled  by Refinitiv had anticipated a loss of 59 cents per share on revenue of $800 million.

Shares of the streaming device company Roku rose more than 2% after Bank of America double upgraded the stock to buy from underperform. The Wall Street firm said Roku is on a path to revenue and margin improvement and that the company has been performing better than the broader advertising market. Roku jumped 11% Thursday after the company reported a smaller-than-expected loss in its latest quarter.

Ahead of the Opening Bell…

The major U.S. stock index futures are down as stubbornly high inflation, a rebound in Treasury yields and hawkish Fed member comments continue to weigh on investor sentiment.