US STOCKS-Futures slide in gloomy start to second-half

Reuters
·2 min read
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* Futures down: Dow 0.39%, S&P 0.37%, Nasdaq 0.39%

July 1 (Reuters) - U.S. stock index futures fell at the start of the second-half on Friday on worries over the hit to economic growth from the aggressive steps by policymakers determined to stamp out raging inflation.

As the era of cheap money draws to a close and a cycle of higher interest rates sets in, investors for much of the year have been selling equities, pushing the benchmark S&P 500 to close out its worst first six months since 1970.

Federal Reserve policymakers have been making a case for a second 75-basis points interest rate hike in July despite sign of slowing economic growth.

Investors have been fretting over the fallout of such a policy on earnings of companies already facing weak demand due to rising prices.

Latest data showed manufacturing activity stalled in Asia and production fell in Europe as higher prices and a darker economic outlook left consumers wary of making purchases.

The Institute for Supply Management's survey, due at 10:00 a.m. ET, is expected to show U.S. factory activity eased further in June.

With the earnings season just weeks away, investors will now listen closely to forecast issued by companies to gauge the extent of impact of inflation as the year progresses.

Markets saw a turbulent first half of the year as fears about aggressive interest rate hikes, geopolitical uncertainty, prolonged supply-chain snarls and COVID-19 lockdowns in China weighed on sentiment.

In the previous session, all three major indexes posted their second straight quarterly declines, with the Dow suffering its biggest first-half percentage plunge since 1962 and the tech-heavy Nasdaq recording its worst-ever first six months.

At 07:35 a.m. ET, Dow e-minis were down 121 points, or 0.39%, S&P 500 e-minis were down 14 points, or 0.37%, and Nasdaq 100 e-minis were down 44.5 points, or 0.39%.

Micron Technology Inc dropped 4.5% in premarket trading as the memory-chip firm predicted current-quarter revenue below market expectations, triggering concern the chip industry was turning toward a down cycle.

Facebook-owner Meta Platforms Inc slipped 0.5%. The company has cut plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees, as he warned them to brace for a deep economic downturn.

Kohl's Corp tumbled 15.7% as the department store chain called off its sale to Vitamin Shoppe-owner Franchise Group, blaming a downturn in market conditions. (Reporting by Amruta Khandekar in Bengaluru; Editing by Arun Koyyur)