Futures lower following another day of losses after Fed rate hike, sell-offs

Stock futures were lower Friday morning as investors continued to react to the Fed’s rate hike and concerns about a possible economic recession.

The Nasdaq 100 fell 0.51%. Dow Jones Industrial Average futures fell 133 points, or 0.44%. S&P 500 futures lost 0.46%.

Costco stock was down around 2.6% in extended trading. Although the retailer posted revenue and profit in the fiscal fourth quarter that beat analysts’ expectations, it is seeing rising transportation and labor costs.

Thursday brought another day of losses as the market remains poised to end the week below where it started. The Nasdaq Composite fell 1.4% to 11,066.81. The S&P 500 fell 0.8% to 3,757.99, while the Dow Jones Industrial Average ended the day down 107.10 points to 30,076.68, a loss of 0.3%.

With the latest pullback, the Dow Jones is down about 2.4% this week. The S&P and Nasdaq both posted slightly steeper declines, falling 3% and 3.3% respectively since the start of the week.

Bond yields also continued to climb, with 2- and 10-year Treasuries hitting highs not seen in more than a decade.

Industrials, consumer discretionary, growth technologies and semiconductors have all been hit by fears of slowing economic growth. Meanwhile, defensive stocks outperformed.

“You just have this volatility that nobody seems to be able to understand,” said Tim Lesko, senior wealth advisor at Mariner Wealth Advisors.

Lesko said more and more investors were starting to accept that a recession could be on the horizon after the Fed’s decision this week to raise rates by 75 basis points and FedEx CEO Raj Subramaniam saying on CNBC last week that he thought one was imminent. Once that happens, Lesko said investors will react differently.

“At some point they will understand that the recession does not mean the end of the world, and they will start to be constructive on equities again,” he said. “But right now, we’re acting like the sky is falling on us.”

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