U.S. stock futures slumped on Thursday, a day after minutes from the Federal Reserve’s rate-setting committee indicated its bond buying program was on its last legs.
* Futures on the Dow Jones Industrial Average YM00, -1.05% fell 327 points;
* Futures on the S&P 500 ES00, -1.00% lost 0.9%;
* Futures on the Nasdaq 100 NQ00, -0.86% retreated by 0.8%.
What’s driving markets
Investors continued to be rattled by the release of the Fed minutes, even though its message — that tapering will start this year — was well choreographed in speeches and articles citing insiders ahead of the release.
“While the formula provided could in principle be consistent with a taper decision in September (particularly given the strong July employment report that came after the FOMC meeting), the overall tone of the debate – including multiple references to the delta variant – seem more consistent with a more methodical approach in which the Fed provides a clear signal in September that a taper decision is coming in November. That was and remains our call,” said economists at Evercore ISI.
Also noteworthy was a U.K. study, from the University of Oxford based on real-world data, that showed diminished effectiveness from coronavirus vaccines to the delta variant. After four to five months, the study found that two doses of the vaccine from Pfizer PFE, -2.20% and BioNTech BNTX, -0.62% was as effective as two Oxford-AstraZeneca AZN, +0.15% jabs.
Robinhood Markets HOOD, +6.71% was set to retreat after the online broker’s cautious outlook on the third quarter.
The selling was particularly intense in Europe, where miners dived nearly 5% to send the Stoxx Europe 600 SXXP, -2.19% down by 2%.
The yield on the 10-year Treasury TMUBMUSD10Y, 1.227% fell to 1.22%.