US stock futures tumbled early Friday, signaling another rough session for Wall Street after Thursday’s heavy sell-off. The downturn comes as investors grow increasingly skeptical about the possibility of a Federal Reserve rate cut in December, a shift that is placing fresh pressure on high-valuation tech stocks.
Futures tied to the Dow Jones Industrial Average slipped around 0.6%, while S&P 500 futures were down 0.8%. Contracts tracking the Nasdaq 100 dropped the most, falling 1.2%, reflecting another wave of weakness in technology names.
The mood follows a deep sea of red on Thursday, when major indexes logged their steepest decline in over a month. Friday’s pre-market action shows little sign of relief, especially for tech giants that have driven much of this year’s gains.
Tesla shares slid 4% in early trading, slipping below the $400 level after suffering their worst day since July. Nvidia, which also dropped sharply Thursday, extended losses with another 3% decline. Concerns around AI valuations have triggered a broader rotation away from high-growth tech stocks toward comparatively safer sectors.
Rate-Cut Expectations Erode as Fed Turns Cautious
A major driver of the market’s pullback is investors’ fading confidence in a December rate cut. Traders now assign less than a 50% chance of a quarter-point cut next month — a dramatic fall from nearly 95% odds just a month ago.
Comments from Minneapolis Fed President Neel Kashkari added to the unease. Kashkari expressed concern that next week’s inflation report could deliver an unwelcome surprise and signaled a more cautious stance on any policy easing.
Uncertainty has been further complicated by the record six-week federal shutdown that left officials without complete insight into labor and price trends. Even after the government’s reopening, questions persist about what economic data will be released — and how complete it will be.
White House Eyes Tariff Cuts to Ease Food Costs
Amid rising cost-of-living concerns, President Trump is preparing to implement substantial tariff cuts aimed at reducing high food prices — a key factor for voters in recent state and local elections. New and revised trade deals with countries such as Argentina and Brazil are designed to make everyday staples, including bananas and coffee, more affordable for American consumers.
Treasury Market Holds Gains Despite Soft Auction
Bonds also saw renewed activity, supported by Thursday’s ADP weekly payrolls report, which showed an 11,000 decline for November so far — a sharp contrast to the prior monthly ADP report that reflected a +42,000 increase.
Treasury futures reacted swiftly, pulling the 10-year yield nearly 5 basis points lower early Friday. Despite a slightly weaker 10-year auction at 1 p.m. ET, the broader bond market held steady, with movements largely mirroring stock market volatility through the afternoon.
9:05 AM: MBS up 10 ticks; 10-year at 4.077%
11:57 AM: MBS at best levels, up 11 ticks; 10-year at 4.059%
1:26 PM: Slight auction-driven pullback; 10-year at 4.064%
3:44 PM: Market remains sideways; 10-year near 4.068%
With stocks under pressure, investors are closely watching both inflation data and Fed commentary to see whether rate-cut hopes will revive or fade further.
