© Reuters
By Peter Nurse
Investing.com — U.S. stocks are seen opening sharply lower Thursday, shedding the previous session’s gains as the post-Fed rally fades amid growing recession concerns.
At 7 AM ET (1100 GMT), the contract was down 575 points or 1.9%, traded 85 points or 2.3% lower, and dropped 315 points or 2.7%.
The main indices on Wall Street closed higher Wednesday, with the blue-chip gaining 300 points or 1%, the broad-based rising 1.5%, while the tech-heavy gained 2.5%.
The Dow and the S&P snapped five-day losing streaks after the took a more aggressive stance toward taming inflation, raising its by three-quarters of a percentage point, its largest increase since 1994, and signaling more hefty hikes were to come.
However, sentiment has turned Thursday as the jumbo-sized interest rate hike has raised fears that the central bank will not be able to engineer a soft landing for the U.S. economy.
Wednesday’s rate hike was accompanied by a downgrade to the Fed’s economic outlook, and analysts at Wells Fargo now put the odds of a U.S. recession at more than 50%.
Data released Wednesday showed that U.S. fell for the first time in five months in May, suggesting that the economy is cooling rapidly, and attention Thursday will switch to the release of data on housing and trends.
for May are due at 8:30 AM ET (1230 GMT) and are expected to come in around 1.7 million, a slowdown compared with 1.724 million for April. for last week are due at the same time and are expected to come in at 215,000, down from 229,000 the week earlier.
In corporate news, Tesla (NASDAQ:) will be in the spotlight after the electric-car manufacturer raised prices for all its car models in the United States, its latest price hike amid ongoing global supply-chain issues.
McDonald’s (NYSE:) will also be in focus after the burger chain agreed to pay around $1.3 billion in fines and back taxes to settle a tax dispute in France, while Elon Musk is expected to reiterate his desire to own Twitter (NYSE:) when he speaks to the social media company’s employees later Thursday.
Oil prices weakened Thursday, continuing the previous session’s weak tone after the Federal Reserve sharply hiked interest rates.
Losses remain small though as sentiment in the market overall remains bullish with global supply crimped by sanctions on Russian oil while demand in China, the world’s largest importer, is set to rebound from COVID restrictions.
U.S. crude stocks rose in the week through June 10, data from the U.S. showed Wednesday, but fell as demand from American drivers remained strong despite the record prices.
By 7 AM ET, futures traded 1% lower at $114.17 a barrel, while the contract fell 1.1% to $117.26.
Additionally, rose 0.1% to $1,822.10/oz, while traded 0.4% lower at 1.0399.
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