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Stock futures drop after Nasdaq Composite closes at two-year low

Stock futures drop after Nasdaq Composite closes at two-year low

Traders on the floor of the New York Stock Exchange, August 8, 2022.

Source: NYSE

US stock futures fell on Tuesday morning after the Nasdaq Composite Index closed at its lowest level in two years during the regular session.

Dow Jones Industrial Average futures were down 250 points, or 0.9%. S&P 500 and Nasdaq 100 futures declined 0.88% and 0.89%, respectively.

Stocks closed lower on Monday, with the Nasdaq Composite down 1% after semiconductor stocks fell. The Dow Jones Industrial Average lost nearly 94 points, or 0.3%, while the S&P 500 lost nearly 0.8%.

Investors weighed comments by JPMorgan CEO Jamie Dimon, who warned that the US was likely to fall into a recession in the next “six to nine months,” and said the S&P 500 could drop another 20% depending on whether The Federal Reserve was planning a hard landing for the economy.

The comments came at the start of a big week for bank earnings for the third quarter, and ahead of Wednesday’s producer price report, Thursday’s CPI report for September and Friday’s retail sales numbers, also for last month.

Investors’ reaction is focused solely on how the Federal Reserve reacts to the economy as it works to curb inflation.

“There is always the notion that there is a Fed pivot around the corner, and they will tighten their belts to bring down inflation without affecting the economy more broadly,” Dan Greenhouse, chief strategist and economist at Solus Alternative Asset Management, said Monday on “Closing Bell: Action.” The Extra” on CNBC.

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“It was all always hopes and dreams. The most likely outcome was…what history shows always happens, which is the Fed tightening, and it tightening too much, causing economic turmoil, and the market going down. A complete stop,” he added.