Futures rebound after rout but recession worries weigh
NEW YORK (June 17) - U.S. stock index futures bounced back on Friday from a brutal Wall Street selloff this week after the Federal Reserve's largest rate hike since 1994 and tightening measures by other major central banks raised fears of a recession.
The benchmark S&P 500 (.SPX) and the tech-heavy Nasdaq (.IXIC) have both plunged 6% so far this week, with the former shedding nearly $2 trillion in this week's selloff alone.
The Fed on Wednesday raised its key rate by 75 basis points to tame decades-high inflation, and officials outlined a faster pace of rate hikes. The Bank of England and the Swiss National Bank also raised borrowing costs, adding to worries of a global economic downturn.
"Even the most ardent buy-the-dipper in the equity space is starting to realize inflation is a threat, with central banks prepared to hike the world into a slowdown and possible recession to get on top of it," said Jeffrey Halley, senior market analyst at OANDA.
Fed Chair Jerome Powell is scheduled to speak at a conference on the "International Roles of the U.S. Dollar" at 8:45 a.m. ET.
The S&P 500 has slumped about 23% this year and recently confirmed it was in bear market territory, or down 20% from its record closing high. The Dow is also on the cusp of confirming its own bear market.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. June 14, 2022. REUTERS/Brendan McDermid/File Photo
Mega-cap firms Apple Inc (AAPL.O), Amazon.com (AMZN.O) and Microsoft Corp (MSFT.O) gained about 1% each in premarket trading after a hammering on Thursday.
The expiration of monthly options contracts is expected to add to the volatility ahead of the Juneteenth market holiday on Monday.
At 06:49 a.m. ET, Dow e-minis were up 172 points, or 0.57%, S&P 500 e-minis were up 29.75 points, or 0.81%, and Nasdaq 100 e-minis were up 123.25 points, or 1.1%.
U.S. shares of Alibaba Group Holding Ltd (9988.HK), jumped 10% after Reuters reported China's central bank has accepted an application by Ant Group, an affiliate of the Chinese e-commerce behemoth, to set up a financial holding company. read more
United States Steel Corp (X.N) rose 7.3% after posting an upbeat second-quarter profit forecast.
REUTERS
