Something wicked this way comes: Futures point to another bloodbath on Wall Street
Dow Jones Industrial Average futures slipped 300 points, S&P 500 contracted 40 points, and Nasdaq futures indicate a 186-point drop at the opening bell.
Investors are disappointed by US corporate earnings. “Expectations for US company earnings are quite high, so whenever they are not being met, the reactions are quite severe,” said Miraji Othman, credit strategist at BayernLB, as quoted by Reuters.
“We have grown used to solid numbers, 18 percent revenue growth, 25 percent revenue growth and so on. The valuations have become quite ambitious.”
US trade wars, Federal Reserve rates policy, and the dispute between Italy and the European Union are also pressuring the markets.
“The first, and most important [worry] is that Fed tightening and fading fiscal stimulus will cause the US economy to take a turn for the worse... The second is that China’s economy will continue to struggle,” analysts at Capital Economics said in a note to clients.
“As we have been arguing for a while now, these worries are likely to get worse over the next 12 months or so.”
While the US markets recovered some losses on Thursday, the previous trading session saw one of the worst sell-offs in recent history. The Dow Jones fell 608 points, or 2.4 percent, to 24,583.42 on Wednesday. The S&P 500 plunged 84.59 points, or 3.1 percent, to 2,656.10, marking its sixth straight losing session, while the tech-heavy Nasdaq dropped over four percent.
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