Dow futures drop 300 points as rates rise, stoking recession fears

Wall Street points to lower open as oil slips

Stock futures fell on Thursday as interest rates surged as Fed officials said hikes to slow inflation were far from over.

Futures tied to the Dow Jones Industrial Average fell 316 points, or 0.9%. S&P 500 futures fell 1.1%, while Nasdaq 100 futures fell 1.2%.

British stone. St. Louis Fed President James Bullard said in a speech that “policy rates are not yet in an area where they might be considered sufficiently restrictive.”

“Changes in the stance of monetary policy appear to have limited impact on observed inflation, but markets are pricing in deflation expected in 2023,” Bullard added.

The yield on the 2-year U.S. Treasury note jumped to 4.42% on Thursday morning, stoking fears that a rate hike would tip the economy into recession.

Stocks most vulnerable to a recession and rising interest rates led to losses in pre-market trading. Financial stocks were lower, led by Wells Fargo. Tech stocks Tesla and Netflix fell.

The latest move came after Wall Street fell for the second time in three days. The S&P 500 and Nasdaq Composite fell 0.83% and 1.54%, respectively. The Dow Jones Industrial Average fell 39.09 points, or 0.12%.

The downward pressure came from weak guidance from Target, which reported lower sales as inflation dampened shoppers heading into the holiday season. The Minneapolis-based chain closed down 13% as its forward guidance cast doubt on other retailers.

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