Stock futures lower after major averages drop, investors eye slowdown

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on June 7, 2022.

Brendan McDermid | Reuters

S&P 500 futures were down late Wednesday after major indexes slipped into the red at the end of regular trading and investors weighed the likelihood of a recession after Federal Reserve Chairman Jerome Powell, acknowledged that was a possibility.

Broad stock index futures fell 0.1%, while Dow Jones Industrial Average futures lost 0.08%. Nasdaq 100 futures fell 0.3%.

In regular trading, the Dow fell 47.12 points, or 0.15%, in the final hour of trading after rallying to start the day. The S&P 500 fell 0.13% and the Nasdaq Composite lost 0.15%.

The moves came after Federal Reserve Chairman Jerome Powell told Congress the central bank was “strongly committed” to bringing inflation down. He also noted that a recession is a “possibility,” a fear that continues to weigh on Wall Street.

“The odds are more likely to be in favor of a recession than not,” Dan Greenhaus, chief strategist at Solus Alternative Asset Management, said on CNBC’s “Closing Bell: Overtime.” “It shows the degree of tightening the Federal Reserve is going to have to do now, having not done so in previous periods when it might have avoided some of the problems that would result.”

“Unfortunately, it’s going to be harder economically than people anticipated at least six months ago, but they’re realizing more and more that’s probably what’s going to happen,” he said. he added.

Elsewhere, energy stocks, which have outperformed in 2022, have been hit by falling oil prices on fears that a slowing economy could hurt demand for fuel. The sector was the worst performer in the S&P 500.

Investors will be eagerly awaiting new data on jobless claims on Thursday. Powell will also make remarks in the House, after addressing the Senate on Wednesday. The remarks are part of a biannual report on monetary policy mandated by Congress.

It’s been a quiet earnings week, but Darden Restaurants will release its financial results for the final quarter before the opening bell on Thursday. Rite Aid announces its latest results the same morning.

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