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executives at Goldman Sachs Group Inc , JPMorgan Chase & Co and
Bank of America Corp said on Tuesday that inflation would erode
consumer spending power and a mild to more pronounced recession
was likely ahead.
Fears of a recession due to the U.S. Federal Reserve's
aggressive rate hikes to curb inflation pulled the S&P 500 lower
for a fourth straight session on Tuesday, with all major Wall
Street indexes closing down 1-2%.
Investors see a 91% chance that the Fed will increase its key
benchmark rate by 50 basis point in December to 4.25-4.50%, with
the rates peaking in May 2023 at 4.97%.
More economic data, including weekly jobless claims, producer
price index and the University of Michigan's consumer sentiment
survey this week, will be on the watch list for clues on what to
expect from the Fed on Dec. 14.
At 6:18 a.m. ET, Dow e-minis were down 36 points, or 0.11%, S&P
500 e-minis were down 8.25 points, or 0.21%, and Nasdaq 100
e-minis were down 34.75 points, or 0.3%.
Mega-cap technology and other growth stocks such as Microsoft
Corp, Apple Inc, Meta Platforms Inc, Nvidia Corp and Tesla Inc
dropped between 0.4% and 1.9% in premarket trading.
Concerns around a steep rise in borrowing costs have boosted the
dollar and dented demand for risk assets such as equities this
year, with the S&P 500 snapping a three-year winning streak and
sinking 17.3% so far in 2022.
Elsewhere, China announced the most sweeping changes to its
tough anti-COVID regime that included allowing infected people
with mild or no symptoms to quarantine at home and dropping
testing for domestic traveling, following protests against COVID
controls.
However, U.S.-listed Chinese stocks such as NetEase Inc, Alibaba
Group Holding Ltd and JD.com Inc tumbled between 3.4% and 5.7%
on profit booking after China's trade shrank the steepest in
2-1/2 years in November.
Among other stocks, GameStop Corp jumped 1.1% ahead of its
third-quarter results where it is expected to report a 4.5% rise
in revenue.
Boeing Co was down 0.8% after U.S. lawmakers declined to extend
an annual defense bill deadline that would impose a new safety
standard for modern cockpit alerts for two new versions of the
aerospace company's best-selling 737 MAX aircraft.
(Reporting by Shubham Batra and Ankika Biswas in Bengaluru;
Editing by Anil D'Silva)
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