Wall Street Set To Slide On Rising Recession Fears

U.S. stock indexes were on track for sharp declines on Thursday, with growth shares taking the biggest hit, after the Federal Reserve's biggest rate increase since 1994 to tame rising prices fanned worries of a recession.

Mega-cap firms Apple Inc and Microsoft Corp fell 2% each in premarket trading, with the Nasdaq 100 futures plunging by a similar margin.

The S&P 500 index snapped a five-session losing streak on Wednesday after the Fed's 75 basis point rate increase met market expectations.

Equities have been under pressure for most of the year on growing worries about surging inflation and higher borrowing costs, with the central bank's latest projection of a slowing economy and rising unemployment in the coming months only adding to those concerns.

"We view it as increasingly likely that a recession and higher unemployment will be necessary to tame inflation: with such a gloomy macro picture looming over the markets," said Geir Lode, head of global equities at Federated Hermes Limited.

Following the Fed meeting, Wells Fargo said the odds of a recession now stand at more than 50%.

The Swiss National Bank raised its policy interest rate for the first time in 15 years in a surprise move on Thursday, while the Bank of England increased borrowing costs by quarter of a percentage point.

The S&P 500 is down 20.5% year-to-date and is in a bear market as investors grapple with a sharp slowdown in growth. The Nasdaq Composite and the S&P 500 indexes were set to mark their 10th weekly decline in past 11 weeks.

"Technically the market remains weak," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"The Fed rally is fading as investors question the central bank's ability to orchestrate a soft landing. The bear market is in full force still and yet to reach a level where stocks can comfortably bounce off of."

At 08:31 a.m. ET, Dow e-minis were down 467 points, or 1.52%, S&P 500 e-minis were down 70 points, or 1.85%, and Nasdaq 100 e-minis were down 250.75 points, or 2.16%.

On the equities front, Morgan Stanley led losses among major U.S. banks with a 2% slide.

Twitter Inc firmed 1.5% ahead of Elon Musk's meeting with its employees after a report said he was expected to reiterate his desire to own the social media company.