Powell comments, China's ICBC hit by ransomware attack - what's moving markets

November 10, 2023 09:10 PM AEDT | By Investing
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Investing.com -- U.S. stock futures were mixed heading into the final day of trading this week, as investors eyed Treasury yield moves and gauged the path ahead for interest rates following a closely-watched statement from Federal Reserve Chair Jerome Powell. Elsewhere, trade in the U.S. Treasury market is disrupted by a cyberattack on China's largest commercial lender by assets, while Apple (NASDAQ:AAPL) agrees to pay out a $25 million settlement over claims regarding its U.S. immigrant hiring practices.

1. Futures mixed

U.S. stock futures were mixed on Friday after the benchmark S&P 500 ended an eight-day winning streak in the prior session.

By 04:40 ET (09:40 GMT), the Dow futures contract had added 32 points or 0.1%, S&P 500 futures were mostly flat, and Nasdaq 100 futures had inched down by 43 points or 0.3%.

The main indices on Wall Street finished lower on Thursday, as investors digested fresh commentary on the Federal Reserve's monetary policy path from Chair Jerome Powell (more below).

The S&P 500 fell by 0.8%, bringing the curtain down on its longest series of consecutive positive days in two years. The tech-heavy Nasdaq Composite and 30-stock Dow Jones Industrial Average also slipped by 0.9% and 0.7%, respectively.

Rattling investors in particular was a jump in U.S. Treasury yields, with the longer-dated 10-year and 30-year yields both edging up by over 10 basis points. Yields typically move inversely to prices.

2. Powell "not confident" policy stance is restrictive enough

Markets were focused on remarks on Thursday from Fed Chair Jerome Powell, who suggested that the U.S. central bank may have more work to do to bring inflation down to its stated 2% target.

Speaking at an International Monetary Fund event in Washington D.C., Powell said that while a recent cooling in price pressures is encouraging, the rate-setting Federal Open Market Committee (FOMC) remains committed to achieving a "sufficiently restrictive" policy stance.

"[W]e are not confident that we have achieved such a stance," he said in a prepared statement.

It was the latest sign that the Fed could be open to further interest rates hikes, potentially denting nascent investor optimism that policymakers may have finished their long-standing tightening campaign. At its latest meeting last week, the FOMC voted to leave the all-important Fed funds rate steady at a target range of 5.25% to 5.50%.

3. Ransomware attack hits China's ICBC

The Industrial and Commercial Bank of China (ICBC) has said that its financial services arm was hit by a ransomware attack that disrupted trade in the U.S. Treasury market, according to multiple media reports.

ICBC Financial Services, the U.S. branch of the bank, reportedly noted that it is looking into the matter and is making progress in recovering from it.

It also said that Treasury trades carried out on Wednesday and repurchase agreements for trades done on Thursday had been successfully cleared. According to Reuters, some market participants had found that trades going through ICBC had not been settled due to the attack, which aims to paralyze a computer system until a ransom is paid.

A spokesperson for China's foreign ministry told reporters at a news conference that ICBC is "closely monitoring" the situation, adding that it is doing its best to minimize the damage from the attack. Business was continuing as normal at other ICBC offices around the world, the spokesperson said.

4. Apple agrees to $25 million settlement over U.S. immigrant hiring practices

Apple is set to pay up to $25 million to settle claims from the U.S. Department of Justice that it favored hiring immigrant workers over American citizens and legal green card holders for some jobs.

The DOJ claimed in a statement that Apple had engaged in a "pattern or practice of citizenship status discrimination" in recruitment for positions it hired through a federal program allowing employers to sponsor immigrant workers for green cards. The tech giant did not recruit U.S. citizens or permanent residents for jobs that were eligible for the program and had instead favored candidates with temporary work visas, the DOJ said.

In response, Apple said that it had "unintentionally not been following the DOJ standard," adding that it is implementing a "robust remediation plan."

The California-based company will be required to pay $6.75 million in civil fines and $18.25 million to an unspecified number of impacted workers, in the biggest-ever settlement for the DOJ involving claims of discrimination based on citizenship.

5. Oil on pace for steep weekly drop

Oil prices rose Friday, but were still heading for a third straight week of steep losses on persistent concerns over slowing global demand and resurgent fears of rising U.S. interest rates.

Worries over possible supply disruptions stemming from the conflict between Israel and Hamas have also started to wane.

By 04:41 ET, the U.S. crude futures traded 0.9% higher at $76.42 a barrel, while the Brent contract climbed 1.0% to $80.77 per barrel.

Both benchmarks are currently down over 5% this week, and are on course for their longest weekly losing streak since a four-week drop from mid-April to early May.

This article first appeared in Investing.com


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