Stock futures fell on Friday morning as investors continued to dump year-end stocks amid fears of a recession next year due to the Federal Reserve’s relentless interest rate hikes.
Futures contracts linked to the Dow Jones Industrial Average lost 352 points, or 1%. S&P 500 futures lost 1% and Nasdaq 100 futures fell 0.8%.
Friday’s sell-off follows a rough day for the markets. The Dow Jones average fell 764.13 points, or 2.25%, on Thursday, its worst daily performance since September. The S&P 500 and Nasdaq Composite fell 2.49% and 3.23%, respectively.
Disappointing retail sales report on Thursday Proposed inflation hits consumers more than expected. This has investors worried about slowing consumer spending, a sign of a weak economy.
With these recent declines, the market is heading into Friday with all indicators poised for a second straight week of losses. The S&P 500 is down 1% for the week and 4.5% for the month of December as hopes of a year-end rally fade.
Stocks have been dropping in the wake Raising the Fed interest rate by 50 basis points On Wednesday – the highest rate in 15 years. The central bank said it will continue to raise interest rates through 2023 to 5.1%, a larger figure than previously expected.
“After being so hopeful on the Fed pivot, stock traders are having indigestion [Wednesday’s] John Lynch, chief investment officer at Comerica Wealth Management, said the FOMC statement, which reiterated Jerome Powell’s “higher for longer” theme.
Stocks that would have been sluggish fell on Friday. General Motors and Caterpillar were both down about 1.5% in premarket trading.
Investors will be watching Friday before earnings bell from Darden Restaurants — parent company Olive Garden, which could provide more insight into consumer spending patterns. They will also be looking for any hints about future Fed policy from speakers John Williams, Michelle Bowman and Mary Daley. Investors are trying to gauge the pace of future rate hikes and the central bank’s view of the economy.
There will also be data in the morning with December PMIs in services and manufacturing.
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