Traders operate on the floor of the New York Stock Exchange (NYSE) in New York, USA, June 15, 2022.
Brendan McDermid Reuters
US stock futures fell on Thursday night after the S&P 500 ended its worst performance in the first half of decades.
Futures tied to the Dow Jones Industrial Average were trading 114 points lower, or 0.4%. S&P 500 and Nasdaq 100 futures were each down 0.3%.
Shares of Micron Technology fell more than 2% in trading after working hours amid disappointing fiscal guidelines for the fourth quarter.
Thursday marked the end of the second quarter and the first half of the year. For the quarter, the S&P 500 fell more than 16% – its biggest drop in a quarter since March 2020. For the first half, the broader market index fell 20.6% for its biggest drop in the first half of 1970. It also fell in the bear market, falling more than 21% from a record high set in early January.
The Dow Jones Industrial Average and the Nasdaq Composite were not spared the pressure. The 30-share Dow lost 11.3% in the second quarter, lowering it by more than 15% for 2022. Meanwhile, the Nasdaq suffered its biggest quarterly decline since 2008, losing 22.4%. These losses pushed the technologically heavy composite deep into the bear market, a decline of nearly 32% from the all-time high set in November. It also decreased by 29.5% on an annual basis.
These steep losses in the first half and quarter come as investors struggle with staggering inflation and tighter monetary policy. The main index of personal consumption expenditures – the preferred indicator of inflation in the Federal Reserve, rose by 4.7% last month on an annual basis. Although this was slightly below the Dow Jones score, it was still close to decades of peaks.
The Fed, for its part, stepped up its efforts against the price jump, rising 0.75 percentage points in June. This is its largest increase since 1994.
Both factors have led to escalating recession concerns. GDP for the first quarter shrank by 1.6%, and the Atlanta Federal Reserve’s GDPNow tracking tool points to another 1% decline in economic output for the second quarter.
“If we have any consolation words, it is that universal losses at this rate rarely occur in consecutive quarters, but this is not the same as saying that no additional losses should be expected,” wrote Michael Schaul of Marketfield Asset Management. . “This still seems to be the middle of history, the period in which the previous ‘Pacific’ perspective is being replaced by something far more turbulent, and we still see no signs that the weather is about to change for the better. “
Traders will accept more economic data on Friday, with ISM’s latest production index and construction cost values to be released at 10 a.m. ET.
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