China cut its prime rate for five-year loans, which influences mortgage prices, by 15 basis points in a reduction that was sharper than expected as authorities seek to cushion the impact of an economic slowdown.
Microsoft Corp, Amazon.com and Apple Inc, rose between 1.5% and 1.8%, providing the biggest boost to the S&P 500 and the Nasdaq.
China cut its five-year loan prime rate (LPR) by 15 basis points on Friday morning, a sharper cut than had been expected, as authorities seek to cushion an economic slowdown.
Shares of the networking gear maker slumped 12.7% as it lowered 2022 revenue growth outlook, taking a hit from Russia exit as well as component shortage due to China lockdowns.
Megacap tech and growth shares such as Apple Inc, Microsoft Corp, Amazon.com, Alphabet Inc and Tesla Inc slipped between 1.1% and 2.4% in premarket trading.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 2% in early Asian trading hours, the first daily decline in a week. Japan's Nikkei tumbled 2.4%.
The mood was underscored by a 9% surge in British consumer prices and a faster-than-expected acceleration in inflation in Canada.
It was the worst one-day loss for the S&P 500 and Dow Jones Industrial Average since June 2020.
Shares of Target Corp fell 25.1% to the bottom of the S&P 500 after its first-quarter profit halved and the company warned of a bigger margin hit on rising fuel and freight costs.
Ten of the 11 major S&P sector indexes advanced, with financials, materials, consumer discretionary and technology all gaining more than 2%.
Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp gained between 1.4% and 4%, providing the biggest boost to the S&P 500 and the Nasdaq.
"The reports should highlight the economic damage from the country's zero-COVID policy - we expect contractions in production and demand indicators," said Bruce Kasman, head of economic research at JPMorgan.
Meanwhile, Wall Street's main indexes opened higher on Friday at the end of a bumpy week marked by rising concerns over tighter monetary policy and slowing economic growth.
Growth stocks such as Apple Inc, Google-owner Alphabet Inc, Amazon.com and Nvidia Corp gained between 2.2% and 6.5% after falling for most of the week.
All three major US stock indexes seesawed and the S&P 500 came within striking distance of confirming it entered a bear market after swooning from its all-time high reached on Jan. 3.
However, the prospect of rising interest rates dented megacap stocks such as Amazon.com, Microsoft Corp, Apple Inc, Meta Platforms and Tesla Inc, which fell between 0.2% and 0.8%.
Banks dropped 2.3%, with JP Morgan Chase & Co down 2.4% to weigh the most on the S&P 500.
Investors are worried about how aggressive the Federal Reserve will need to be to tame inflation. The U.S. central bank last week hiked interest rates by 50 basis points.
Global financial markets are also spooked by concerns over interest rate hikes and extended COVID-19 lockdowns in China that are hurting the world's No. 2 economy.
S&P 500 stock futures led the way with a drop of 1.0%, while Nasdaq futures shed 0.9%. U.S. 10-year bond yields edged up to a fresh top at 3.15%.
The U.S. dollar index gained for a fifth week in a row last week and touched an almost 20-year high after the U.S. Federal Reserve hiked its benchmark funds rate 50 basis points and strong jobs data reinforced bets on further big hikes.
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