Futures Pointing To Continued Weakness On Wall Street

Stocks are likely to come under pressure in early trading on Friday, extending the sharp pullback seen over the two previous sessions. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 330 points.

The downward momentum on Wall Street comes amid ongoing concerns about the outlook for interest rates and the economy.

The Fed’s hawkish tone in Wednesday’s monetary policy announcement has added to worries about the central bank’s aggressive rate hikes tipping the economy into a recession.

While inflation has recently shown signs of slowing, the Fed signaled it plans to continue raising interest rates next year.

A recent batch of disappointing economic data has led to fears the Fed’s fight against inflation is already taking its toll on the economy.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

Next week, the Commerce Department is due to release its report on personal income and spending, which includes a reading on inflation said to be preferred by the Fed.

With Fed Chair Jerome Powell saying the central bank will require “substantially more evidence” inflation is on a sustained downward trend before halting its rate hikes, traders are likely to keep a close eye on the inflation reading.

Stocks moved sharply lower during trading on Thursday, extending the pullback seen over the course of Wednesday’s session. With the sell-off on the day, the major averages slumped to their lowest closing levels in over a month.

The major averages climbed off their lows of the session in late-day trading but remained firmly negative. The Dow tumbled 764.13 points or 2.3 percent to 33,202.22, the Nasdaq plunged 360.36 points or 3.2 percent to 10,810.53 and the S&P 500 dove 99.57 points or 2.5 percent to 3,895.75.

In overseas trading stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slumped by 1.9 percent, while Australia’s S&P/ASX 200 Index slid by 0.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.5 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both down by 1.3 percent.

In commodities trading, crude oil futures are plunging $2.07 to $74.04 a barrel after slumping $1.17 to $76.11 a barrel on Thursday. Meanwhile, after tumbling $30.90 to $1,787.80 an ounce in the previous session, gold futures are rising $7.10 to $1,794.90 an ounce.

On the currency front, the U.S. dollar is trading at 137.08 yen versus the 137.78 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0620 compared to yesterday’s $1.0628.

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