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U.S. stock futures tumbled in early trading on Friday, putting the three major indexes on course for their worst week of the year as investors retreated from risk markets amid ongoing political chaos in Washington.
Stocks closed lower on Thursday, U.S. Treasury yields rose sharply and the dollar tested two-year highs against its peers around the world, as markets failed to recoup losses caused by the Federal Reserve’s hawkish comments on Wednesday as it announced its final rate cut of the year.
Indeed, the Fed’s forecast shows policymakers are wary of uncertainty about President-elect Donald Trump’s political and economic agenda, both of which were evident yesterday.
Rebecca Mezistrano-TheStreet
The president-elect first cast doubt on a bipartisan spending bill aimed at averting a government shutdown based on recommendations from billionaire Elon Musk, backing a watered-down version that ultimately failed to win Republican approval. support from party members.
The failure of the spending bill, and Trump’s attempts to include an extension of the debt ceiling pause in the negotiations, may raise investor concerns about the new Congress passing Trump-era tax cuts.
lockout showdown
That leaves House Speaker Mike Johnson scrambling to reach a deal before today’s midnight closing deadline.
Trump also waded into the tariff debate, threatening to impose new taxes on the European Union unless EU member states “cover their huge deficits with the United States through massive purchases of our oil and gas.”
RELATED: Fed Chairman Powell is ‘the adult in the room’ as Trump lashes out at Congress
The collective action sent stocks sharply lower before trading began on Friday, with futures contracts tied to the S&P 500 pointing to a 52-point opening loss.
The Dow Jones Industrial Average futures price, which ended nine consecutive days of decline last night, fell back to 2,841 points, while the Nasdaq Index, which is dominated by technology stocks, fell by 300 points.
Meanwhile, CBOE Group’s VIX index has surged to its highest level since August, last trading at $25.82, suggesting traders expect daily moves in the S&P 500 next month of about 1.6%, or 95 points.
European stocks slide
Stocks beyond normal market pullbacks include FedEx (FDX) The package delivery group rose 8.6% in premarket after it said it would sell its freight unit, a move that offset a disappointing quarterly earnings report.
Nike (NKE) Meanwhile, the company’s second-quarter profit beat Wall Street forecasts, sending shares down 3.6%, but posted a modest update as it continues its turnaround under new CEO Elliott Hill. near-term sales prospects.
More Wall Street analysts:
- Veteran analyst predicting rise in Rocket Lab stock price updates price target
- Analysts adjust Ciena stock price target after outlook on artificial intelligence
- Top analysts revisit Micron stock price targets ahead of first-quarter earnings
In overseas markets, Trump’s latest tariff threat caused the Stoxx 600 index in Frankfurt to fall by 1.51%, and the FTSE 100 index in London to fall by 0.96%.
In Asia overnight, the Nikkei 225 fell 0.29% for the week, while the MSCI ex-Japan index closed down 1.2%.
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