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Stock market news live updates: Stock futures fall, extending this week’s slide

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U.S. stock futures extended the week’s downtrend as concerns over sustained higher interest rates and the prospect of an economic downturn outweighed optimism around easing COVID protocols in China.

Futures tied to the S&P 500 (^GSPC) sank 0.7%, while futures on the Dow Jones Industrial Average (^DJI) fell 160 points, or 0.5%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) were off by 1.1%.

In commodity markets, oil traded near $74 per barrel after sliding roughly 10% this week to its lowest level since January.

“Fears are growing that economies are in for a rough time ahead as feverish inflation and the bitter interest rate medicine being used to bring it down take effect,” Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said in a morning note, pointing also to recession warnings from U.S. bank bosses and gloomy trade data in China. “Despite today’s easing of restrictions, it’s clear China’s Covid nightmare is not at an end.”

A chorus of downbeat remarks from Wall Street leaders on Tuesday further weighed on already slumping sentiment this week as many expressed concerns over the toll of inflation and elevated interest rates on U.S. consumers.

JPMorgan Chief Executive Officer Jamie Dimon said the $1.5 trillion in excess savings across Americanns’ bank accounts were being eroded by rising prices, while warning the winddown of disposable cash may “derail the economy and cause this mild or hard recession that people are worried about.” Bank of America chief Brian Moynihan echoed a similar message, indicating that while consumers are still spending money, the rate is beginning to slow.

Meanwhile, Goldman Sachs (GS) CEO David Solomon projected stocks will barrel lower in 2023 and placed the probability of a soft landing at a mere 35% – a view at odds with in-house economists at his investment bank, who anticipate in their baseline forecast that the U.S. will narrowly avoid a recession next year.

“There’s a very reasonable possibility that we could have a recession of some kind,” Solomon said in an interview at the Wall Street Journal’s CEO Council Summit Wednesday afternoon.

David Solomon, Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders Investment Summit in Hong Kong, China November 2, 2022. REUTERS/Tyrone Siu

David Solomon, Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders Investment Summit in Hong Kong, China November 2, 2022. REUTERS/Tyrone Siu

Reports that China’s government will scale back some zero-COVID rules appeared to underwhelm investors weighing easing restrictions against economic data out of the nation that showed falling imports and exports in November.

Back in the U.S., investors await another round of economic data as inch closer to the Federal Reserve’s final rate-setting meeting this year next week.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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