U.S. Stock Index Futures Under Pressure Ahead of PMI Data, Federal Reserve Speakers

The major U.S. stock index futures markets are sharply lower early Friday as investors continued to lighten up on the long side in response to data that elevated concerns of a looming recession ahead of a number of Federal Reserve speakers scheduled throughout the U.S. session.

At 08:41 GMT, the blue chip Dow Jones Industrial Average futures contract is trading 33219.00, down 217.00 or -0.65%. The benchmark S&P 500 Index is at 3895.25, down 32.00 or -0.81% and the tech-weighted NASDAQ Composite is trading 11348.50, down 108.50 or -0.95%.

Sellers continue to pound the U.S. markets in a continuation of Wednesday’s sell-off. In the previous session, the Dow lost 2.25% for its worse daily performance since September. The S&P 500 and NASDAQ Composite fell 2.49% and 3.23%, respectively.

Two Catalysts Worrying Investors

Stocks started to weaken late Wednesday in the wake of the Federal Reserve’s 50 basis point interest rate hike to a target range of 4.25% and 4.5% – the highest rate in 15 years. The central bank said it would continue hiking rates through 2023 to 5.1%, a larger figure than previously expected.

The selling pressure accelerated on Thursday after the U.S. released disappointing retail sales numbers. The report suggested inflation is hitting consumers more than expected. This raised flags for consumers that spending is slowing, a sign that the economy is weakening.

Consumer Spending Key Concern

Investors will get the chance to respond to earnings data before the opening bell on Friday. Results from Olive Garden parent Darden Restaurants could provide more insight into consumer spending patterns.

Fed Speakers Could Set the Tone

Several Federal Reserve speakers will be speaking throughout Friday’s session. Investors will be trying to gauge the pace of future rate hikes and the central bank’s view of the economy based on remarks from Fed speakers John Williams, Michelle Bowman and Mary Daily. Their comments could escalate the selling pressure or soothe the bears enough to book profits and stabilize prices.

More Data on Business Conditions

There also will be data coming out on Friday with December’s purchasing managers’ indexes within services and manufacturing. The indexes are seen as gauges of business conditions. Traders are expecting manufacturing to come in at the same rate as November, while pricing in services to show an increase of 0.3 points, CNBC wrote.