Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, June 15, 2022.
Brendan Mcdermid | Reuters
U.S. stock futures fell Thursday night after the S&P 500 closed its worst first-half performance in decades.
Dow Jones Industrial Average futures traded 67 points below, or 0.2%. The S&P 500 and Nasdaq 100 futures also fell 0.2% each.
Shares of Micron Technology fell more than 2% in out-of-hours operations due to the disappointing fourth-quarter fiscal stance.
Thursday closed the second quarter and first half of the year. During the quarter, the S&P 500 fell more than 16%, its largest quarterly drop since March 2020. During the first half, the broader market index fell 20.6% for its biggest drop in the first half since 1970. It also fell in the bear market, more than 21% more than the all-time high set in early January.
The Dow Jones Industrial Average and the Nasdaq Composite were not saved from the onslaught. The 30-share Dow lost 11.3% in the second quarter, falling more than 15% by 2022. The Nasdaq, meanwhile, suffered its biggest quarterly drop since 2008. , losing 22.4%. These losses pushed the technology-heavy compound into bearish territory territory, nearly 32% from the all-time high set in November. It has also dropped 29.5% so far.
These sharp losses in the first half and quarterly occur when investors struggle with very high inflation and tighter monetary policy. The basic index of personal consumption expenditure, the Federal Reserve’s preferred inflation indicator, rose 4.7% last month on a year-on-year basis. Although it was slightly below the Dow Jones estimate, it was still close to the highs of several decades.
The Fed, in turn, has stepped up its efforts against rising prices, up 0.75 percentage points in June. This was its largest increase since 1994.
Both factors have led to an escalation of concerns about the recession. First-quarter GDP contracted 1.6%, and Atlanta Federal Reserve’s GDPNow follow-up points to another 1% drop in economic output for the second quarter.
“If we have words of consolation, it’s that universal losses at this rate rarely occur in successive quarters, but that’s not the same as saying no more losses should be anticipated,” wrote Michael Shaoul of Marketfield Asset Management . “This still seems to be the middle of the story, the period when a previously ‘peaceful’ outlook is replaced by something much more stormy, and we still haven’t seen any sign that the weather is about to improve.”
Traders will have more economic data on Friday, with the latest ISM manufacturing index and construction spending numbers to be released at 10:00 ET.
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