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Rate-sensitive growth stocks took the biggest beating, with Nasdaq 100 futures slumping about 3%.
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 U.S. 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 (NYSE:WFC) said the odds of a recession now stand at more than 50%.
With inflation hitting double digits, central banks globally are adopting an aggressive stance to tame soaring prices.
The Swiss National Bank raised its policy interest rate for the first time in 15 years in a surprise move on Thursday, while the Bank of England looked set to raise borrowing costs later in the day.
The S&P 500 is down 22.2% year-to-date and is in a bear market as investors grapple with a sharp slowdown in growth and its impact on company earnings.
At 5:09 a.m. ET, Dow e-minis were down 610 points, or 1.99%, S&P 500 e-minis were down 94.75 points, or 2.5%, and Nasdaq 100 e-minis were down 354.5 points, or 3.05%.
Mega-cap firms Apple Inc (NASDAQ:AAPL) and Microsoft Corp (NASDAQ:MSFT) lost more than 3% each in premarket trading, while Morgan Stanley (NYSE:MS) led losses among major U.S. banks with a 2% slide.
