Stock futures fell on Wednesday, as traders worried about the possibility of a recession as the Federal Reserve could raise interest rates for longer than expected.
Futures related to the Dow Jones Industrial Average fell 97 points, or 0.3%, while S&P 500 futures lost 0.46%, and Nasdaq 100 futures fell 0.7%.
Wall Street is emerging from another tough session, with the Dow Jones down more than 350 points, or 1.03%. The S&P 500 and Nasdaq Composite lost 1.4% and 2%, respectively.
Investors were losing hope that the Fed would be able to engineer a so-called soft landing that successfully mitigate inflation through higher rates and also avoid a recession. Instead, concerns revolve around the state of the economy and the possibility of a recession in 2023.
“All in all, financial indicators point to a looming recession,” Azhar Iqbal of Wells Fargo wrote in a note to clients on Wednesday. “The S&P 500 has peaked before recessions with an average lead time of four months over the past few business cycles. Given the inverted yield curve, it is clear that markets are preparing for a recession in 2023.”
Investors are waiting for more economic data this week to get clues about what to expect from the Federal Reserve. Mortgage loan application data showed a decline last week despite lower interest rates.
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