S&P 500 futures fell on Wednesday night after the major indexes plunged into the red at the end of the regular session and investors weighed the possibility of a recession after Federal Reserve Chairman Jerome Powell admit it is a possibility.
Futures tied to the broad market index fell 0.1%, while the Dow Jones Industrial Average futures lost 0.08%. Nasdaq 100 futures fell 0.3%.
In regular trading, the Dow fell 47.12 points, or 0.15%, in the final hour of the session, after recovering to start the day. The S&P 500 lost 0.13% and the Nasdaq Composite lost 0.15%.
The moves come after Federal Reserve Chairman Jerome Powell told Congress that the central bank “strong commitment” to reduce inflation. He also noted that a recession is a “possibility,” a fear that continues to weigh on Wall Street.
“It’s more likely to be in favor of a recession than not,” Dan Greenhaus, chief strategist at Solus Alternative Asset Management, said on CNBC. “That speaks to how much tightening the Federal Reserve will have to do right now, if not in the previous periods they would have probably avoided some of the problems that are coming.”
“Unfortunately, it’s going to cause more economic pain than people at least six months ago anticipated, but increasingly comes down to the fact that that might be what’s going to happen,” he added.
Elsewhere, energy stocks, which have outperformed in 2022, took a hit as oil prices fell on concerns that a slower economy could hurt fuel demand. The worst performing sector in the S&P 500.
On Thursday, investors should expect fresh jobless claims data. Powell will also make remarks to the House of Representatives, after addressing the Senate Wednesday. These comments form part of the bimonthly report authorized by Congress on monetary policy.
It’s been a quiet earnings week, but Darden restaurants will report their financial results for the most recent quarter before the opening bell on Thursday. Rite Aid announced the latest results on the same morning.
