U.S. Stock Futures Fall as Growth Fears Weigh


U.S. stock futures slid Friday, as investors braced for slower economic growth after global central banks this week underlined their commitment to raising interest rates to quell inflation.

Futures tied to the S&P 500 and the Dow Jones Industrial Average both fell 0.9%, while contracts tied to the tech-heavy Nasdaq 100 were down 1.1%. All three indexes were on track for their fourth consecutive day of declines.

Investors fear central-bank efforts to contain soaring inflation with higher borrowing costs will weigh on growth. This week brought a slew of central bank meetings, with policymakers in the U.S., Switzerland and South Africa among those lifting borrowing costs. The global commitment to policy tightening has further eroded hopes among investors for a soft landing, or only a modest hit to growth instead of a full-blown recession.

“All central banks are singing from the same hymn sheet: they’re trying to get on top of inflation no matter what,” said Antoine Bouvet, a senior rates strategist at ING. “The Fed set the tone very clearly…they will continue regardless of the economic pain inflicted on the economy.”

A trader at the New York Stock Exchange earlier this month. Futures pointed to a fourth day of declines for U.S. indexes Friday.



Photo:

ANDREW KELLY/REUTERS

U.S. Treasury yields pushed higher Friday as investors braced for more policy tightening. The 10-year U.S. Treasury yield rose to 3.752% from 3.705% a day earlier, which marked its highest close since February 2011.

European government bonds were also swept by selling, led by the U.K. after the government of new Prime Minister Liz Truss unveiled a large package of tax cuts that will require £72.4 billion in new borrowing. 

The yield on a 10-year U.K. government bond surged to 3.705% from 3.502% just before the announcement. Yields rise as prices fall.

The WSJ Dollar Index, which measures the U.S. currency against a basket of peers, rose 0.6% as the euro and British pound tumbled to new multi-decade lows. The Japanese yen fell 0.3% against the U.S. dollar, resuming its selloff a day after Japan directly intervened in the foreign-exchange market, buying yen and selling dollars for the first time in 24 years.

In commodity markets, oil prices came under pressure. Brent crude, the global benchmark, fell 2% to $87.70. Investors fear a slowing economy will weigh on demand for crude. 

Overseas, the pan-European Stoxx Europe 600 and U.K.’s FTSE 100 both fell 1.6%.

Stocks in Asia also declined. Hong Kong’s Hang Seng Index lost 1.2%, while in mainland China, the Shanghai Composite Index slipped 0.7%. Japanese markets were closed for a holiday.

Write to Chelsey Dulaney at chelsey.dulaney@wsj.com

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