U.S. stock futures were slightly higher on Thursday morning following a big decline in the major averages as traders weighed another large rate hike from the Federal Reserve.
Dow Jones Industrial Average futures rose 110 points, or 0.36%. S&P 500 futures added 0.27% and Nasdaq 100 futures inched 0.1% higher.
Stocks closed lower on Wednesday, continuing the recent sell-off trend as investors evaluated the Fed’s latest comments. The Dow slumped 522 points. Both the S&P 500 and Nasdaq Composite shedding more than 1.7% each, putting both averages at their lowest levels since June 30 and July 1, respectively. The big drop in equities came in a volatile period after the Fed’s third consecutive 0.75 percentage point rate increase.
“Yesterday’s FOMC meeting was a tough pill for markets to swallow and I think this likely continues for three reasons that came out of the Fed,” said Saira Malik, Nuveen’s chief investment officer, citing higher interest rates, inflation, and unemployment.
Policymakers on Wednesday pledged to continue raising rates as high as 4.6% in 2023 before pulling back in the fight against inflation, spurring fears on Wall Street that the economy could tip into a recession as the central bank aims to slow economic growth.
The Fed expects to raise its year-end rate to 4.4% in 2022, continuing aggressive action against rising prices through the remainder of the year.
“I think they should slow down,” DoubleLine Capital CEO Jeffrey Gundlach said Wednesday on CNBC’s “Closing Bell: Overtime.” “Monetary policy has lags that are long and variable, but we’ve been tightening now for a while,” he added, noting that the impact of the tightening could lead to a recession.
On the economic front, the latest data on weekly jobless claims is expected Thursday at 8:30 a.m. ET.