Stock futures were lower on Friday morning as investors reacted to data that raised fears of a looming recession and looked ahead to a series of Federal Reserve speakers scheduled for later in the day.
Futures tied to the Dow Jones Industrial Average lost 112 points, or 0.34%. S&P 500 futures lost 0.27% and Nasdaq 100 futures also fell 0.32%.
Continuing Wednesday’s selloff, the Dow fell 764.13 points, or 2.25%, for its worst daily performance since September on Thursday. The S&P 500 and Nasdaq Composite fell 2.49% and 3.23%, respectively.
Thursday’s disappointing retail sales report suggested that inflation is hitting consumers harder than expected. This makes investors worried that consumption is slowing, a sign that the economy is weakening.
With these latest declines, the market is heading into Friday with all indices poised for another week of losses in a row.
Shares have fallen in the wake of the Federal Reserve’s 50 basis point rate hike to a target range of 4.25% to 4.5% – the highest rate in 15 years. The central bank said it will continue to raise interest rates through 2023 to 5.1 percent, a higher figure than previously expected.
“Having settled on hopes for a Fed central bank, equity traders are experiencing indigestion from yesterday’s FOMC statement, which echoed Jerome Powell’s ‘higher for longer’ theme,” said John Lynch, chief investment officer of Comerica Wealth Management.
Investors will look to Friday’s before-the-clock earnings from Olive Garden parent Darden Restaurants, which could provide more insight into spending patterns. They will also look for any hints about future Fed policy from speakers John Williams, Michelle Bowman and Mary Daly. 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 tomorrow with December’s purchasing managers’ indices in services and manufacturing. The indices are seen as gauges of business conditions. Production is expected to come in at the same pace as November, while services are expected to increase by 0.3 points.