U.S. stock index futures fell on Friday, after Tesla CEO Elon Musk said he had a “super bad feeling” about the economy, fueling fresh worries that aggressive policy tightening by the Federal Reserve could tip the economy into a recession.
Tesla Inc shares fell 3.4% in premarket trading after Musk said he wants to cut about 10% of jobs at the electric-car maker, and warned about the economy in an email to executives seen by Reuters. read more
The tech-heavy Nasdaq 100 futures turned negative and were last down 79.25 points, or 0.61%.
“Musk has a tendency to say exactly what he thinks and believes, and he does have a fair point,” said Fiona Cincotta, senior financial markets analyst at City Index.
“Although the Fed thinks a soft landing is possible, I do think there are some warning signs in the economy. The question is will they be able to act as aggressively as they need to Musk doesn’t think that they’re going to be able to without putting the economy into a deep recession.”
JPMorgan Chase Chief Executive Jamie Dimon earlier this week described the challenges facing the U.S. economy as akin to a “hurricane”.
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Wall Street’s main indexes have sold off sharply this year, with the Nasdaq shedding over 20% so far this year on growing recession fears as the Federal Reserve hikes interest rates aggressively to combat soaring inflation.
At 05:44 a.m. ET, Dow e-minis were down 92 points, or 0.28% and S&P 500 e-minis were down 16 points, or 0.38%.
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