Dow futures fall 300 points as rates rise, raising fears of recession

Interest rates fell on Thursday as Federal Reserve officials said interest rate hikes to slow inflation are still a long way off.

Futures for 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 President James Bullard said in a speech “The policy rate is still not in the zone of being considered sufficiently constrained.”

“The change in monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests inflation is expected to rise in 2023,” Bullard added.

The 2-year Treasury yield rose to 4.42% on Thursday morning, raising fears that higher rates could send the economy into recession.

Stocks more vulnerable to recession and higher rates led to losses in pre-market trading. Funding led by Wells Fargo was underwhelming. Tech stocks Tesla and Netflix fell.

The latest moves followed a rough 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%.

The downward pressure from Weak guidance from Target said sales fell as inflation pinched shoppers heading into the holiday season. The Minneapolis-based chain ended down 13%, while its forward guidance cast doubt on other retailers.

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