Futures tied to the Dow Jones industrial average fell 316 points, or 0.9%. S&P 500 futures fell 1.1%, while Nasdaq-100 futures fell 1.2%. St. Louis Federal Reserve Bank President James Bullard said in a speech that “the policy rate is not yet in a zone that can be considered sufficiently restrictive.” “The change in the stance of monetary policy appears to have had only a limited impact on observed inflation, but market prices suggest that deflation is expected in 2023,” Bullard added. The 2-year Treasury yield jumped to 4.42% on Thursday morning, raising fears that higher interest rates would push the economy into recession. Stocks more vulnerable to a recession and higher interest rates led the losses in premarket trading. Financials led by Wells Fargo were lower. Tech stocks Tesla and Netflix fell. The latest moves followed a down day on Wall Street, the second in three days. The S&P 500 and Nasdaq Composite fell 0.83% and 1.54%, respectively. The Dow Jones Industrial Average lost 39.09 points, or 0.12%. Downward pressure came from weak guidance from Target, which reported a drop in sales as inflation pinched shoppers heading into the holiday season. The Minneapolis-based chain closed 13% lower, while its future guidance called into question other retailers.
