Futures slump as recession fears loom

US stock index futures fell sharply on Thursday, pointing to a reversal of the previous session’s rally, as fears of a recession grew after the Federal Reserve’s biggest rate hike in nearly three decades.

Rate-sensitive growth stocks took the biggest beating, with Nasdaq 100 futures slumping about 3 per cent.

The Fed on Wednesday matched market expectations by hiking interest rates by 75 basis points. It also projected a slowing economy and rising unemployment in the coming months in the face of worst inflation in 40 years, raising risk of a downgrade to US corporate profit in third and fourth quarter.

“The Fed is now painting a central scenario that is getting much closer to a hard landing,” Deutsche strategist Jim Reid wrote in a note.

Post Fed meeting Wells Fargo said the odds of a recession now stand at more than 50 per cent.