Futures are flat after another day of losses following Fed rate hike, sell-off
Stock futures were largely flat on Wednesday evening as investors continued to react to the Fed̵[ads1]7;s interest rate hike and concerns over a potential economic downturn.
The Nasdaq 100 was up 10 points or 0.09%. Dow Jones Industrial Average futures rose 41 points, or 0.14%. S&P 500 futures added 4 points, or 0.11%.
Costco shares fell about 2.6% in extended trading. Although the retailer posted fiscal fourth-quarter earnings and revenue that topped analysts’ expectations, it is seeing higher shipping and labor costs.
Thursday brought another day of losses as the market remains poised to end the week below where it started. The Nasdaq Composite fell 1.4% to 11,066.81. The S&P 500 fell 0.8% to 3,757.99, while the Dow Jones Industrial Average ended the day 107.10 points lower at 30,076.68, a loss of 0.3%.
With the latest pullback, the Dow has given up about 2.4% this week. Both the S&P and Nasdaq saw somewhat steeper declines, falling 3% and 3.3% week-to-date, respectively.
Bond yields also continued to rise, with 2- and 10-year Treasuries hitting highs not seen in more than a decade.
Industrials, consumer discretionary, growth technology and semiconductors were all affected by fears of easing the growth of the economy. Meanwhile, defensive stocks fared better.
“You just have this volatility that nobody seems to be able to get their head around,” said Tim Lesko, senior wealth adviser at Mariner Wealth Advisors.
Lesko said more investors are beginning to accept that a recession may be on the horizon after the Fed’s decision this week to raise interest rates by 75 basis points and FedEx CEO Raj Subramaniam said on CNBC last week that he believed one was imminent. When that happens, Lesko said investors will react differently.
“At some point, they’ll figure out that recession doesn’t mean the end of the world and they’ll start getting constructive on stocks again,” he said. “But right now we’re acting like the sky is falling.”