Stocks were setting up to fall at Thursday’s open after strong labor data spurred fears around further Federal Reserve interest rate hikes, reviving concerns about the impact of those hikes on the economy.
Futures on the S&P 500 (^GSPC) were down 0.8%, as were those on the Dow Jones Industrial Average (^DJI), with a drop of about 280 points. Futures on the tech-focused Nasdaq 100 (^IXIC) lost around 1%.
All three major benchmarks logged losses Wednesday, after surprisingly hawkish minutes from the Fed’s June meeting showed some policymakers were reluctant to back a pause as finally decided. Almost all backed more increases in 2023.
Markets are now seeing an 89% chance of a hike at the Fed’s July meeting, according to the CME FedWatch tool.
In focus Thursday are fresh data on the US labor market and services activity due later, given stocks have previously faced headwinds from concerns the Fed’s rate hikes could tip the economy into recession. The reports will serve as an appetizer for the crucial June jobs report out on Friday.
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