Stock futures were flat Friday morning as investors responded to data that elevated concerns of a looming recession and looked ahead to a slew of Federal Reserve speakers scheduled for later in the day.
Futures tied to the Dow jones Industrial Average gained 3 points, trading near the flatline. S&P 500 futures were fractionally lower and Nasdaq-100 futures were slightly higher.
In a continuation of Wednesday’s sell off, the Dow dropped 764.13 points, or 2.25%, for its worse 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 inflation is hitting consumers more than expected. This has investors concerned that consumer spending is slowing, a sign that the economy is weakening.
With these latest declines, the market is heading into Friday with all the indexes poised to notch a second consecutive week of losses.
Stocks have been falling in the wake of the Federal Reserve’s 50 basis point interest rate hike to a target range between 4.25% and 4.5% — the highest rate in 15 years. The central bank said it would continue hiking rates through 2023 to 5.1%, a larger figure than previously expected.
“After gouging themselves on hopes for a Fed pivot, equity traders are experiencing indigestion from yesterday’s FOMC statement, which reiterated Jerome Powell’s theme of ‘higher for longer,'” said John Lynch, chief investment officer for Comerica Wealth Management.
Investors will be watching Friday for before the bell earnings from Olive Garden parent Darden Restaurants, which could provide more insight into consumer spending patterns. They will also look for any hints on 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 also will be data coming in the morning with December’s purchasing managers’ indexes within services and manufacturing. The indexes are seen as gauges of business conditions. Manufacturing is expected to come in at the same rate as November, while services is expected to increase by 0.3 points.