Stocks, futures drop amid mounting recession woes

U.S. futures signaled extended stock-market losses Thursday after central bankers issued warnings on inflation and fueled concern that aggressive policy will end in recession.

Nasdaq 100 contracts dropped 1.8 per cent while S&P 500 futures declined 1.4 per cent. The tech-heavy gauge managed to end Wednesday’s trading slightly higher, while the S&P 500 fell for a third straight day. In Europe, the Stoxx Europe 600 Index slid 1.9 per cent.

Traders ramped up bets that the global economy will buckle under central bank tightening campaigns -- and that policy makers will eventually backpedal. The bond market shifted to price in a half-point rate cut in the Federal Reserve’s benchmark rate at some point in 2023. 

Meanwhile, the cost of insuring European junk bonds against default crossed 600 basis points for the first time in two years on Thursday.