S&P 500 futures inched lower on Friday as the markets close out a losing week driven by fears of the Federal Reserve pulling back its stimulus.
Futures on the broad index shed 0.2%. Dow Jones Industrial Average futures dropped 90 points, or 0.3%. Nasdaq 100 futures traded up 0.1%.
All three major stock indexes are on track to close the week lower. The S&P 500 and the Dow are both on track to post their worst weekly performances since June, while the Nasdaq Composite is set to see its worst week since May.
The S&P 500 is down 1.4% for the week through Thursday, while the Dow is off 1.75% and the Nasdaq Composite is 1.9%. lower.
Minutes from the Fed’s July meeting released this week showed the central bank is willing to start reducing its monthly asset purchases this year. Investors sold equities and commodities this week and bought bonds on fears the move by the Fed may upend a global economy already under stress by the delta variant.
This week, WTI crude oil has tumbled roughly 9% and copper has lost more than 7% on the fears, taking energy and materials stocks with them. The 10-year Treasury yield was at 1.232% on Friday morning, down from 1.78% in late March.
“With Fed tapering coming while delta variant keeps spreading, the transition away from liquidity/policy regime to more mid-cycle markets means we may experience a bumpier ride ahead,” wrote Barclays equity strategists in a note. “Market narrative may thus turn more cautious, as concerns about peaking growth rates, Delta variant and policy mistake may prove headwinds, at a time where seasonality and technicals are unfavourable.”
Tesla shares were higher in premarket after Elon Musk’s electric car maker had an AI day, where it unveiled a new custom chip and plans to build a humanoid robot. Tesla shares are off 6% this week on concern about slowing growth in one of its key markets China.
The S&P 500 snapped a two-day losing streak in Thursday’s regular trading session while the Dow ended its third-straight day in red.
After volatile trading, the S&P 500 closed 0.1% higher. The Nasdaq Composite added 0.1%. The Dow bucked the trend and shed 66.57 points.
“Against a backdrop of thin liquidity as investors take summer vacations, minor stock market corrections are to be expected in a market that is pricing in peak earnings, extended price-to-earnings ratios and elevated economic growth expectations,” Richard Saperstein, chief investment officer at Treasury Partners, said.
—CNBC’s Pippa Stevens contributed reporting.