Stock futures slide after major averages extend losses to start the week

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Stock futures fell Tuesday morning, reversing directions after the Bank of Japan announced the broadening of its target return range.

Futures contracts linked to the Dow Jones Industrial Average lost 236 points, or 0.72%. S&P 500 and Nasdaq 100 futures fell 0.86% and 1.05%, respectively.

In regular Monday trading, the Dow Jones lost more than 162 points, or about 0.5%. The S&P 500 fell 0.9% and the Nasdaq Composite lost nearly 1.5%. Stocks are on track to end the month and year in the red, and investors’ hopes of a Santa Claus rally are quickly fading.

“There’s still no Santa sighting. Fasten your seatbelt,” said Louis Navellier, founder of growth investment firm Navellier & Associates. “One would like to think that all the bad news is there. There are no more moves from the Fed until February at the earliest. We are not regressing, but we are certainly not recouping the losses of last week.”

Fears that the Federal Reserve could tip the economy into a recession plagued investors. Last week, the central bank raised its benchmark interest rate by 50 basis points and policymakers indicated that the terminal rate could rise to as high as 5.1%.

Other central banks in hawkish mode put additional pressure on traders, with the European Central Bank raising rates and its outlook for further hikes last week.

“More than 90% of central banks have raised interest rates this year, making the (mostly) global coordinated effort unprecedented,” said Lawrence Gillum, fixed income strategist at LPL Financial. “The good news? We believe we are close to the end of these rate hike cycles, which may dampen the headwind we have seen in global financial markets this year.”

A handful of big companies will release their quarterly results this week ahead of the Christmas holidays. General Mills will report before the bell on Tuesday. Nike and FedEx are expected to report after the bell.

As for economic data, data on housing starts for November are due Tuesday morning. This week promises a lot of insight into the housing industry. Data on existing home sales and new home sales will be released on Wednesday and Friday, respectively.

November’s personal consumption expenditure report, a preferred measure of inflation for the Fed, is due Friday.

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