U.S. stock futures plummeted ahead of trading on Wednesday after a key Treasury yield curve inverted signalling an impending recession. The yield on the 10-year Treasury note slipped below the 2-year rate. Traditionally, this is believed to be a reliable indicator that a recession is around the corner. A flight toward safe haven assets led to the yield on the 30-year Treasury bond falling to a record low.
Consequently, the Dow threatens to lose around 400 points at the start of trading itself. Other worrying economic cues surfaced, with China’s industrial output increasing at its slowest pace in 17 years for the month of July. The country’s retail sales growth was also weaker than expected. Meanwhile, European stocks declined following the release of dismal German and Eurozone second-quarter GDP numbers.
Ahead of the opening, retailer Macy’s (M - Free Report) missed second-quarter earnings and revenue estimates. Meanwhile, Cisco Systems (CSCO - Free Report) and Agilent Technologies (A - Free Report) are slated to report fiscal fourth-quarter and fiscal third-quarter earnings, respectively.