US stock futures fell sharply on Friday, set to add to Wall Street’s steepest sell-off in over a month as ebbing faith in a December interest-rate cut puts pressure on riskier assets like Big Techs.
Dow Jones Industrial Average futures (YM=F) slid roughly 0.6%, while those on the S&P 500 (ES=F) dropped close to 1%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) tumbled around 1.5%.
Another sea of red awaits stocks after Thursday’s bruising session, which saw the major indexes log their steepest one-day declines in over a month.
Tech is again in the forefront, as AI concerns drive an exodus to less hotly valued sectors. Tesla (TSLA) shares fell 4% in premarket to break below $400, on the heels of its worst day since July. Nvidia (NVDA), which also tanked, moved 3% lower.
The mood is gloomy as worries grow that the Federal Reserve will slow its pace of policy easing, given the increasingly hawkish tone taken by its officials. Traders now see less than 50% odds of a quarter-point rate cut next month, down from about 95% a month ago. Minneapolis Fed President Neel Kashkari became the latest to lose appetite for rate cuts as he flagged “resilience” in the US economy and continued concerns over inflation.
Policymakers lack insight into price pressures as well as the jobs market after the record six-week federal shutdown. Questions still remain as to what data will end up being released — and in what form it will be unveiled — now that the government has reopened.
In a nod to price pressures, President Trump is preparing to make substantial cuts to tariffs to bring down high food costs, a concern for voters in recent state and local elections. Several trade deals with Argentina, Brazil and other Latin American countries also aim to make the likes of bananas and coffee more affordable.
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