Stock futures fall after Nasdaq composite closes at two-year low

Wall Street set to open lower after Nasdaq closes at two-year low

U.S. stock futures were flat on Tuesday after the Nasdaq Composite closed at a two-year low during its regular session.

Dow Jones Industrial Average futures fell 54 points, or 0.18%, rebounding from a slump that sent the index down about 200 points in premarket trading. S&P 500 futures fell 0.34% and Nasdaq 100 futures fell 0.43%.

Stocks ended lower on Monday, with the Nasdaq Composite down 1% as semiconductor stocks fell. The Dow Jones Industrial Average fell nearly 94 points, or 0.3%, while the S&P 500 lost about 0.8%.

Bond prices also fell. U.S. 10-year Treasury yields rose about 5 basis points to 3.937% after nearing the key 4% level overnight. Bond yields are inversely proportional to price, and a basis point is one percent of one percent.

The move comes as investors weigh comments from JPMorgan Chase CEO Jamie Dimon, who warned the U.S. could slip into a recession in the next “six to nine months” and said the S&P 500 could fall again 20%, depending on whether the Fed designs a soft or hard landing for the economy.

The remarks came at the start of an important week for third-quarter bank earnings and ahead of Wednesday’s producer prices report, Thursday’s September CPI report and Friday’s retail sales data, also last month’s data .

Investor reactions have focused entirely on how the Fed will respond to the economy to keep inflation in check.

“This is a poor stock market environment, grappling with a weak economy, uncertainty about earnings and how long the Fed’s tightening will last, as well as extreme risk aversion in investor psychology,” said David Bahnsen, chief investment officer at The Bahnsen. “The panel, in Tuesday’s note.

“We think the Fed will raise rates one or two times until the federal funds rate hits 4%, then pause, at which point the Fed will assess the damage done,” he added.

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