Stock futures were flat on Friday morning as investors reacted to data raising concerns about a looming recession and looking ahead to a series of Federal Reserve speakers scheduled for later in the day.
Futures tied to the Dow Jones Industrial Average gained 3 points and traded near the zero line. S&P 500 futures were marginally lower and Nasdaq 100 futures were marginally higher.
Continuing Wednesday’s sell-off, the Dow fell 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 suggests inflation is hitting consumers harder than expected. This has investors concerned that consumer spending is slowing, a sign that the economy is slowing.
With these latest declines, the market heads into Friday with all indices poised for a second straight week of losses.
Stocks fell to a target range of between 4.25% and 4.5% on the back of the US Federal Reserve’s 50 basis point rate hike – the highest interest rate in 15 years. The central bank said it would hike rates further to 5.1% by 2023, a higher number than previously expected.
“Having jumped on hopes of a Fed pivot, stock traders are feeling indigestion after yesterday’s FOMC statement, which reiterated Jerome Powell’s ‘longer higher’ theme,” said John Lynch, chief investment officer of Comerica Wealth Management .
Investors will be watching earnings from Olive Garden parent company Darden Restaurants on Friday, which could provide a better insight into consumer spending patterns. You’ll also be looking for clues to 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.
Data will also arrive in the morning with the December Services and Manufacturing PMIs. The indices are viewed as a gauge of business conditions. Manufacturing is expected to arrive at the same rate as November, while services are expected to rise 0.3 points.