Futures slide after Musk’s warning on economy
2022.06.03 13:22
FILE PHOTO: The Nasdaq logo is displayed at the Nasdaq Market site in New York, U.S., May 2, 2019. REUTERS/Brendan McDermid
(Reuters) – U.S. stock index futures fell on Friday, after Tesla (NASDAQ:TSLA) 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.
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 (NYSE:JPM) Chief Executive Jamie Dimon earlier this week described the challenges facing the U.S. economy as akin to a “hurricane”.
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%.
