Futures drop on interest rate hike concerns

Futures drop on interest rate hike concerns



(Reuters) – Wall Street futures fell on Monday, as growth-sensitive technology stocks and growth stocks led declines as investors worried that a Federal Reserve interest rate hike could push the U.S. economy into recession.

Both the Nasdaq and the Nasdaq posted their worst weekly percentage decline since June on Friday as markets posted at least a 75 basis point rise in prices for the week, with Fed Fund futures showing a 21% chance of a massive 100 basis point increase.

Unexpectedly hot inflation data in August last week also increased bets for a rate hike down the road, with the final US federal funds rate now at 4.46%.

heavy weights Microsoft Corporation (NASDAQ :), Amazon.com (NASDAQ :), Meta Platforms, Alphabet (NASDAQ :), Apple Inc (NASDAQ :), Tesla (NASDAQ :)), Nvidia (NASDAQ 🙂 Corp. fell between 1.0% and 1.4% in pre-market trading.

Bank of America (NYSE) fell 1.4% to lead declines among major US banks.

The focus will also be on the new economic outlook, due to be published along with the policy statement at 2 PM ET (1800 GMT) on Wednesday.

Goldman Sachs (NYSE::) cut its US GDP forecast for 2023 late Friday as the Federal Reserve expects to be more aggressive and sees that as pushing the unemployment rate higher than previously expected.

Fears of Fed tightening have already contributed to an 18.7% drop in the S&P 500 this year, with a recent terrible earnings report from delivery company FedEx (NYSE:), an inverted US Treasury yield curve and warnings from the World Bank and International Monetary Fund about the slowdown adds. The impending global economic trouble.

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The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose to 27.90 points, just approaching its highest level in more than two months.

At 6:26 AM ET, it was down 285 points, or 0.92%, down 37.75 points, or 0.97%, and it was down 121.75 points, or 1.02%.

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