The U.S. stock index futures fell on Thursday, indicating further sell-off on Wall Street as investors keep a close eye on the impact of rising inflation on the U.S. economy and corporate earnings.
The S&P 500 index and the Dow Jones Industrial Average logged their biggest one-day percentages on Wednesday after disappointing results from retailer Target Corporation at a time when consumers are being bitten by hard inflation.
Cisco Systems Inc fell 12.5% in pre-market trading as networking gear maker China lowered its 2022 revenue growth outlook due to the lockdown and the Ukraine conflict.
The S&P 500 is down 17.7% so far in 2022, driven by factors such as the severity of China’s epidemic lockdown, the conflict in Ukraine and the harshness of the US Federal Reserve.
High-growth stocks led to sell-offs as investors struggled to adjust to tight financial conditions. The benchmark index is down 18.2% from its record close on January 3 and a tech-heavy pier below 20% will confirm the market area joining Nasdaq.
Goldman Sachs strategists estimate that the U.S. economy has a 35% chance of going into recession in the next two years, while Morgan Stanley’s latest research shows a 25% chance of a recession starting in the next 12 months.
The Wells Fargo Investment Institute lowered its economic prospects on Wednesday with a mild U.S. recession on the horizon in its base case situation in late 2022 and early 2023.
Shares of Megacap Technology and growth such as Apple Inc, Microsoft Corp, Amazon.com, Alphabet Inc and Tesla Inc fell between 1.1% and 2.4% in pre-market trading.
Morgan Stanley is down 1% to lead the fall among the big banks.
At 06:22 am ET, the Dow e-minis is down 407 points or 1.29%, the S&P 500 e-minis is down 53 points or 1.35%, and the Nasdaq 100 e-minis is down 169 points or 1.42%.
The CBOE Volatility Index, also known as the Wall Street Fear Measure, rose to 32.72 points, the highest since May 12. (Reporting by Devik Jain in Bangalore; Edited by Shaunak Dasgupta)