Stock futures fell Thursday as interest rates jumped with Federal Reserve officials signaling interest rate hikes to slow inflation are far from over.
Futures tied to the Dow Jones Industrial Average dipped 316 points, or 0.9%. S&P 500 futures slipped 1.1%, while Nasdaq-100 futures fell 1.2%.
St. Louis Federal Reserve President James Bullard said in a speech that “the policy rate is not yet in a zone that may be considered sufficiently restrictive.”
“The change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023,” added Bullard.
The 2-year Treasury Yield jumped to 4.42% Thursday morning, raising fears higher rates would send the economy into a recession.
Stocks most vulnerable to a recession and higher rates led the losses in premarket trading. Financials led by Wells Fargo were lower. Tech shares Tesla and Netflix declined.
The latest moves followed a down day on Wall Street, the second in three days. The S&P 500 and Nasdaq Composite fell 0.83% and 1.54%, respectively. The Dow Jones Industrial Average lost 39.09 points, or 0.12%.
Downward pressure emerged from weak guidance from Target, which reported a decline in sales as inflation pinches shoppers heading into the holiday season. The Minneapolis-based chain ended 13% lower, while its forward guidance cast doubt on other retailers.