US pre-open: Early gains erased as futures turn sharply lower
US stock futures turned sharply lower ahead of the opening bell, erasing gains made the previous session, as equities tracked European and Asian markets into the red.
By 0653 ET, the Dow was showing a 0.7% decline, while the S&P 500 was trading 0.8% lower and the Nasdaq was pointing to a drop of 1.0%, with futures dropping into the red after erasing earlier gains.
Stocks in Europe were registered hefty losses, with the Dax in Frankfurt and Cac in Paris sinking 1.8% and 1.3% respectively, amid concerns about slowing economic growth worldwide. Reports of an escalation in fighting between Russia and Ukraine were also likely weighing on sentiment.
Meanwhile, Hong Kong's Hang Seng also tanked 2.2%, though market chatter pointed to a bout of profit-taking in the tech sector following a recent rally.
Wall Street stocks raced ahead on Wednesday on the back of dovish signals from Federal Reserve chair Jerome Powell. While the Fed left interest rates on hold, as expected, Powell said that a predicted increase in inflation – due to an escalating trade war – would likely only be "transitory", with the dot plot still pointing to two interest-rate cuts this year.
The Federal Open Market Committee did, however, lower its growth projections and raise its forecasts for inflation amid increased economic uncertainty.
10-year US Treasury yields continued to decline following the FOMC meeting, trading 2.4 basis points lower at 4.213%.
Later in the session on Thursday, investors will be keeping a closely on a raft of economic data, including weekly initial jobless claims and the Philly Fed manufacturing survey for March, both due out at 0830 ET, and existing home sales for February scheduled at 1000 ET.
Meanwhile, a host of blue chips will release earnings results before the opening bell on Thursday, including Accenture, Micron Technology, Nike and FedEx.