US stock futures slipped on Friday morning as fears of aggressive Federal Reserve policy sent equity markets heading for heavy weekly losses and Treasury yields continued to climb dangerously to fresh highs.
Futures tied to the benchmark S&P 500 fell 1.2% in early trade, while those on the Dow Jones Industrial Average fell more than 300 points, or 1.1%, to the lowest level since March 2021. Technology stocks lead the way down, with Nasdaq future 1.3%.
Meanwhile, the 10-year US Treasury note rose above 3.7, hitting its highest level since 2010. The US dollar index hit a new two-decade high of 112.10. And in commodity markets, crude fell, with West Texas Intermediate (WTI) futures down 2.3% to $81.57 a barrel and Brent crude down 2% at $88.61 a barrel.
The moves come after Federal Reserve officials raised interest rates by 75 basis points for the third straight time earlier this week and Chairman Jerome Powell suggested in hawkish remarks that policymakers were willing to accept economic pain in exchange for restore price stability.
Goldman Sachs has cut its year-end 2022 target for the S&P 500 index by about 16% to 3,600 points from 4,300.
“The path of expected interest rates is now higher than we previously assumed, skewing the distribution of equity market returns below our projections,” Goldman’s David Kostin said in a note.
“Based on our discussions with clients, the majority of equity investors have accepted the view that a hard landing scenario is inevitable and their focus is on the timing, size and duration of the potential downturn and investment strategies for that view, ” he wrote.
In corporate news, Costco ( COST ) was among the movers Friday after the wholesale retailer reported fiscal fourth-quarter earnings and revenue that beat Wall Street estimates but said inflationary pressures were weighing on profit margins as consumer habits change. Pre-market shares were down 3%.
Shares of FedEx (FDX) slipped about 2% in extended trading after the shipping giant announced cost-cutting measures and rate increases, one week after a gloomy pre-earnings announcement sent its stock tumbling 20%.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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