Stock futures fell on Monday as worries about rising interest rates and tighter monetary policy fueled a flight that began in the previous session.
Futures for the Dow Jones Industrial Average slipped 264 points, or about 0.8%. Those for the S&P 500 and Nasdaq 100 fell 1% and 1.2%, respectively.
Wall Street suffered a sharp sell-off on Friday as Federal Reserve Chair Jerome Powell’s brief and blunt comments in Jackson Hole, Wyoming appeared to snuff out hopes that the central bank was changing its aggressive stance on interest rate hikes in the coming months .
The Dow fell 1,008 points, or just over 3%, on its worst day since May. The S&P 500 and Nasdaq Composite fell 3.4% and 3.9%, respectively, on their worst days since June. The decline wiped out August gains for all three averages.
“Investors have again reduced their recent risk-on positioning, supporting our view that it is far too early to characterize their recent risk-on stance as a more permanent stance, and now one that has likely cost them dearly,” Rick Bensignor by Bensignor Investment Strategies in a note to clients.
Meanwhile in Europe over the weekend, European Central Bank Executive Board member Isabel Schnabel warned that central banks must continue to fight inflation – even if it pushes economies into recession.
The coming week will bring more Fed speeches, including Vice Chair Lael Brainard on Tuesday ahead of Friday’s August nonfarm payrolls report.