S&P 500 and Dow futures indicate yet another selloff for investors
Copper prices fall for a second day
Oil prices fall after report of rig additions by Iraq
U.S. stock futures tumbled more than 2 percent as worries over slowing growth and rising interest rates hit stocks across the board and erased gains from two years.
Copper prices fell for a second day in a row. Oil prices fell after a report of sharp increases in some oil production by Iraq.
The S&P 500 and Dow Jones Industrial Average futures were trading down nearly 2 percent, their biggest fall in two months.
The Cboe Volatility Index, or VIX , the most widely used measure of fear in the market, rose 2.9 percent to 20.86.
“The notion of a two-speed economy has returned with a vengeance this week, with an obvious negative implication for consumer/retail stocks as well as hard assets dependent on domestic activity and a better than expected industrial production report as evidence of the speedbump,” wrote Gordon Charlop, managing director of Rosenblatt Securities, in a note.
The International Monetary Fund lowered its 2018 economic outlook on Wednesday, with the IMF estimating the global economy to grow at 3.7 percent, the weakest since the aftermath of the financial crisis.
European economic sentiment dropped in June, while stronger wage growth throughout the eurozone highlighted the need for the European Central Bank to raise interest rates.
“While one should tread cautiously in betting on a quick turnaround for the U.S. equity market, it appears that the focus has shifted to the relative health of the U.S. economy versus potential stress in a world where an emerging-market slowdown, a collapsing euro, a weaker Japanese Yen, the politically sensitive U.S.-China trade war and a crumbling UK are all in play,” wrote Tom Stringfellow, co-chief investment officer at Frost Investment Advisors.
Some analysts warned that stocks could fall further before the year ends if interest rates climb higher.
“Unless we go to 3 percent in some of these economies, and then the rich get richer and the poor get poorer, I’m not sure where the economic softening would come from,” said Benjamin Frankel, an analyst at Mizuho.
The Dow Jones Industrial Average dropped 363.27 points, or 1.26 percent, to 25,007.57, the S&P 500 shed 59.43 points, or 2.13 percent, to 2,755.04 and the Nasdaq Composite dropped 140.34 points, or 1.63 percent, to 7,842.50.
The Chicago Board Options Exchange Volatility Index, or VIX, rose 2.90 percent to 20.86.