Traders on the floor of the NYSE, August 8, 2022.
U.S. stock futures traded lower on Tuesday morning after the Nasdaq Composite closed at a two-year low in the regular session.
Dow Jones Industrial Average futures fell 250 points, or 0.9%. S&P 500 and Nasdaq 100 futures fell 0.88% and 0.89% respectively.
Shares closed lower on Monday, with the Nasdaq Composite dropping 1% on lower semiconductor stocks. The Dow Jones Industrial Average lost nearly 94 points, or 0.3%, while the S&P 500 fell about 0.8%.
Investors weighed comments from JPMorgan CEO Jamie Dimon, who warned the US was likely to fall into a recession in the “next six to nine months”, and said the S&P 500 could fall 20% additional depending on whether the Federal Reserve conceives of a soft or a hard landing of the economy.
The remarks came at the start of a big week for bank earnings in the third quarter, and ahead of Wednesday’s producer price report, Thursday’s consumer price index report for September and the Friday’s retail sales figures, also for last month.
Investor reaction focuses solely on how the Federal Reserve will react to the economy as it strives to rein in inflation.
“There’s always this idea of a Fed pivot coming around the corner, and they’re just going to tighten their belts to bring inflation down without affecting the economy more broadly,” Dan Greenhaus, strategist in chief and economist at Solus Alternative Asset Management, said Monday on CNBC’s “Closing Bell: Overtime.”
“It was all always hopes and dreams. And the most likely outcome was…what history shows always happens, which is the Fed is tightening, it’s tightening too much, it’s causing an economic dislocation, the market crashes. Period,” he added.