Wall Street set to open lower on growing concerns over economic slowdown

  • Dow and S&P futures down for the seventh time in eight days
  • Airlines and cruises fall on trip cancellations over hurricane warnings
  • Futures down: Dow 1.22%, S&P 1.47%, Nasdaq 1.80%

Sep 29 (Reuters) – U.S. stock indices were expected to open lower on Thursday as fears of a global economic slowdown from aggressive central bank rate hikes and potential contagion risks from a turmoil in British markets made risk averse investors.

Dow and S&P 500 e-minis fell for the seventh time in eight sessions, while megacap growth names such as Amazon.com Inc, Apple Inc (AAPL.O), Microsoft Corp, Meta Platforms Inc and Tesla Inc (TSLA.O) lost between 1.6% and 2.7% in premarket trading.

The calm brought by the Bank of England’s decision on Wednesday to buy long-term government securities to stabilize the market turmoil caused by the government’s new economic plan was short-lived.

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The pound fell and bond prices fell, with the massive sell-off of British assets spreading even to safe-haven US Treasuries and top-rated German bonds. Read more

In the previous session, the S&P 500 recorded its first gain in seven sessions. The benchmark has lost about $9.1 trillion in market value this year and was last valued at $31.2 trillion, according to Datastream.

S&P 500 loses $9 trillion in market rout in 2022

“You need to see the market start to stabilize and that won’t happen until it understands if the Fed is done raising interest rates or if the earnings season is better than expected,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Yields on many Treasuries, which are considered virtually risk-free if held to maturity, now eclipse the S&P 500 dividend yield, which recently stood at around 1.8%, according to Refinitiv. Data stream. Read more

Meanwhile, comments from Federal Reserve Cleveland Chair Loretta Mester echoed other central bank officials throughout the week, who pledged further interest rate hikes to controlling inflation. read more read more

The latest data showed the US labor market remained resilient, with the number of Americans filing new claims for unemployment benefits dropping unexpectedly last week to 193,000 despite sharp interest rate hikes from the Fed and the slowdown in demand. Read more

As of 8:37 a.m. ET, Dow e-minis were down 364 points, or 1.22%, S&P 500 e-minis were down 55 points, or 1.47%, and Nasdaq 100 e-minis were down 207.75 points, or 1.8%.

American Airlines (AAL.O) fell about 2.2% as carriers canceled nearly 2,000 US flights on Thursday after Hurricane Ian hit Florida’s Gulf Coast with catastrophic force during the one of the most powerful American storms in recent years. Read more

Shares of peers United Airlines Holdings (UAL.O), Southwest Airlines (LUV.N) and Delta Air Lines (DAL.N) fell between 1.6% and 2.0%.

U.S. cruise lines Norwegian Cruise Line Holdings Ltd (NCLH.N) and Carnival Corp (CCL.N) fell 2.1% after delaying or canceling trips ahead of the hurricane.

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Reporting by Susan Mathew, Ankika Biswas and Shreyashi Sanyal in Bengaluru; Additional reporting by Medha Singh Editing by Anil D’Silva and Arun Koyyur

Our standards: The Thomson Reuters Trust Principles.

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