(Bloomberg) -- European stocks dropped Friday as disappointment over technology earnings stoked worries about the economic outlook and took some of the shine off this week’s global equity rebound.
The Stoxx 600 Index ticked lower after a gauge of manufacturing activity in France fell more than forecast. An Asian share index fluctuated in listless performance across the region after a China tech jump fizzled. Nasdaq 100 contracts pared losses to trade 0.7% lower, while those on the S&P 500 slipped 0.3%
The downbeat mood in stocks followed a drop of about 27% in social-media firm Snap Inc. in extended US trading on poor results that flagged worries about an advertising and wider economic slowdown.
The plunge weighed on Facebook parent Meta Platforms Inc. and Google’s Alphabet Inc., overshadowing the best three-day S&P 500 gain since late May.
Treasuries trimmed a surge from the Wall Street session but the 10-year yield is still below 3%. Rising US jobless claims, a dimming regional factory outlook and a weaker leading economic indicator signaled recession risks amid tightening monetary policy, bolstering demand for bonds.
Traders are also watching President Joe Biden’s condition after he tested positive for Covid and showed mild symptoms.
Global stocks remain on course for their best week in a month, paring this year’s equity market rout to about 18%. Speculation that the worst of the selloff has passed is partly behind the move.
But angst about the damage from inflation and rapidly rising interest rates is proving hard to shake -- despite a tempering in expectations of just how aggressive the Federal Reserve will be. A dollar gauge pushed higher in a sign of caution.
“I would point out that we have a lot of earnings to come next week, we have the Fed meeting next week,” Susquehanna International Group derivatives strategist Chris Murphy said on Bloomberg Television. “I don’t necessarily think we’re totally out of the woods yet.”
Meanwhile, the euro unwound an advance sparked by the European Central Bank’s 50 basis-point interest-rate hike, the first increase in 11 years.
Focus will now turn to the Fed’s meeting next week, where the central bank is again expected to increase interest rates to tame scorching inflation.
Investors are also closely watching the second-quarter earnings season for clues on how companies are weathering the impact of surging prices and gloomy consumer sentiment
Elsewhere, West Texas Intermediate crude topped $97 a barrel, while gold and Bitcoin were little changed.