Stock futures were lower Friday morning as investors continued to dump stocks into year-end on fears a recession is ahead next year because of the Federal Reserve’s unrelenting rate hiking.
Futures tied to the Dow jones Industrial Average lost 352 points, or 1%. S&P 500 futures lost 1% and Nasdaq-100 futures fell 0.8%.
Friday’s selling follows a rough day for markets. The Dow dropped 764.13 points, or 2.25%, on Thursday for its worse daily performance since September. 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. The S&P 500 is off 1% for the week and 4.5% for the month of December as hopes for a year-end rally fizzle.
Stocks have been falling in the wake of the Federal Reserve’s 50 basis point interest rate hike on Wednesday — 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 [Wednesday’s] FOMC statement, which reiterated Jerome Powell’s theme of ‘higher for longer,’” said John Lynch, chief investment officer for Comerica Wealth Management.