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Investors are trying to come to terms with Fed Chair Jerome
Powell's recent comments, signaling more policy tightening
ahead, and the central bank's projection that interest rates
would breach the 5% mark in 2023, a level not seen since 2007.
Money market participants expect at least two 25 bps rate hikes
next year and a terminal rate of about 4.9% by midyear, before
falling to around 4.4% by 2023 end.
The benchmark S&P 500 and the Nasdaq suffered their steepest
percentage drop in six weeks, with the Dow Jones Industrial
Average falling the most in three months on Thursday.
Investors will monitor the S&P Global manufacturing and services
PMI for December after the opening bell for more clues on the
current state of the economy, and San Francisco Fed President
Mary Daly's comments to gauge the pace of future rate hikes at
12 p.m. ET.
Economic data on Thursday showed poor U.S. retail sales in
November, even as the labor market remained strong with the
number of Americans filing for unemployment benefits falling
last week.
The simultaneous expiration of stock options, stock index
futures and index options contracts later in the day, known as
triple witching, could cause volatility through the trading
session.
At 6:03 a.m. ET, Dow e-minis were down 419 points, or 1.26%, S&P
500 e-minis were down 53 points, or 1.35%, and Nasdaq 100
e-minis were down 118 points, or 1.03%.
Meta Platforms Inc jumped 1.7% in premarket trading after JP
Morgan upgraded the stock to "overweight" from "neutral".
Adobe Inc gained 4.2% after the company forecast first-quarter
profit above expectations.
(Reporting by Shubham Batra and Ankika Biswas in Bengaluru;
Editing by Anil D'Silva)
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