U.S. stock market index futures edged lower on Wednesday as recession warnings echoed among top Wall Street bankers. This has limited market confidence spurred by China's easing of zero Covid-19 regulations.
The top executives at Goldman Sachs Group Inc (NYSE:GS), JPMorgan Chase & Co (NYSE:JPM) and Bank of America Corp (NYSE:BAC) said on Tuesday that inflation will erode consumer spending power and a moderate-to-more recession significant may occur for the future.
Recession concerns from the US Federal Reserve's aggressive rate hikes to curb inflation sent the S&P 500 lower for a fourth straight session on Tuesday, with all major Wall Street indexes closing down 1-2%.
Investors see a 91% chance that the Fed will raise its key benchmark rate by 50 basis points in December to 4.25-4.50%, with rates peaking in May 2023 at 4.97%.
Market players will focus on economic data such as weekly jobless claims, the producer price index and the University of Michigan consumer sentiment survey this week for clues on what to expect from the Fed on December 14.
Other mega-cap technology and growth stocks such as Microsoft Corp , Apple Inc , Meta Platforms Inc, Nvidia Corp and Tesla Inc fell between 0.4% and 1.9% in premarket trading.
Concerns about a sharp rise in borrowing costs have driven the US dollar lower and dampened demand for risky assets such as equities this year, with the S&P 500 ending a three-year rally and declining 17.3% so far in 2022.
Elsewhere, China announced its most significant changes to tough anti-Covid-19 rules including allowing infected people with mild or no symptoms to be quarantined at home and dropping tests for domestic travel, following protests over Covid-19 control.
However, Chinese stocks listed in the U.S. such as NetEaseInc, Alibaba Group Holding Ltd and JD.com Inc fell between 3.4% and 5.7% on profit bookings after Chinese trade shrank the steepest in 2-1/2 years in November.
Among other stocks, GameStop Corp jumped 1.1% ahead of its third-quarter results where it is expected to report a 4.5% rise in revenue.
Boeing Co fell 0.8% after US lawmakers refused to extend the deadline for an annual defense bill that would have imposed new safety standards for modern cockpit warnings for two new versions of the aerospace company's best-selling 737 MAX plane.
