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U.S. futures fall over 1% on growth worries amid Covid, focus turns to Federal Reserve

September 20, 2021 05:02 PM

U.S. futures fall over 1% on growth , focus turns to Federal Reserve
All eyes on Wednesday will be on the Federal Reserve policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.

U.S. stock index futures fell 1% on Monday, as investors worried about rising COVID-19 cases and the pace of economic growth at the start of a week in which the Federal Reserve will decide on potentially tapering its massive pandemic-era stimulus.

Futures tracking the blue-chip Dow index, which mainly comprises stocks reliant on a steady economic recovery, were down 1.5% by 04:31 a.m. ET.

Wall Street’s main indexes have been hurt this month by fears of potentially higher corporate tax rates denting earnings and have shrugged off signs inflation might have peaked. The benchmark S&P 500 is on track to snap a seven-month gaining streak.

All eyes on Wednesday will be on the Federal Reserve policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.

Also Read : Fed Chair says taper could start in 2021, with no rush on rate hike

“Anything pointing to a November tapering decision may support the U.S. dollar further and perhaps extend the latest setback in equities,” said Charalambous Pissouros, head of research at JFD Group.

“Market participants may also be eager to find out whether this could also result in earlier rate hikes.” Global equity markets have also been on edge recently over deepening troubles at China Evergrande, the world’s most indebted property developer.

Its shares sank more than 15% on Monday on worries about its ability to repay a small portion of its $305 billion debt due this Thursday.

In the United States, S&P 500 e-minis were down 1.23%, and Nasdaq 100 e-minis were down 1.05%.

Economically sensitive industrials Boeing Co and Caterpillar Inc slipped 1.7% and 1.9%, respectively.

Banking stocks including Morgan Stanley, JPMorgan Chase & Co and Bank of America Corp fell between 1.8% and 2.7% in premarket trading, tracking U.S. Treasury yields.

A slate of U.S.-listed Chinese stocks including Weibo Corp , Bili Bili Inc, VIP shop Holdings Ltd and Pinduoduo Inc shed between 3.4% and 5.4% amid a widening regulatory crackdown in China

Heavyweight technology-related stocks, which have tended to perform better during times of economic uncertainty, were among the smallest decliners.

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