Futures signal more selling on Wall Street as growth fears mount

US stock index futures fell on Thursday, signaling more selling on Wall Street as investors kept a close eye on the impact of rising inflation on the U.S. economy and corporate earnings.

The S&P 500 index and the Dow Jones Industrial Average on Wednesday logged their biggest one-day percentage loss since June 2020 after dismal results from retailer Target Corp underscored just how hard inflation is biting consumers.

Cisco Systems Inc slumped 12.5% in premarket trading as the networking gear maker cut its 2022 revenue growth outlook due to China lockdowns and the Ukraine conflict.

The S&P 500 is down 17.7% so far in 2022, hit by factors ranging from the severity of China's pandemic lockdowns, the conflict in Ukraine and the U.S. Federal Reserve's hawkish stance.

High-growth stocks led the sell-off as investors scramble to adjust to tightening financial conditions. The benchmark index is down 18.2% from its record close on Jan. 3 and a close below 20% will confirm bear market territory, joining its tech-heavy peer Nasdaq.

Goldman Sachs strategists estimated a 35% probability of the U.S. economy entering a recession in the next two years, while Morgan Stanley's latest research showed a 25% probability for a recession starting in the next 12 months.

Wells Fargo Investment Institute on Wednesday reduced its economic expectations with a mild U.S. recession now on the horizon in its base case scenario for the end of 2022 and early 2023.

Megacap tech and growth shares such as Apple Inc, Microsoft Corp, Amazon.com, Alphabet Inc

and Tesla Inc slipped between 1.1% and 2.4% in premarket trading.

Morgan Stanley dipped 1% to lead declines among the big banks.

At 06:22 a.m. ET, Dow e-minis were down 407 points, or 1.29%, S&P 500 e-minis were down 53 points, or 1.35%, and Nasdaq 100 e-minis were down 169 points, or 1.42%.

The CBOE volatility index, also known as Wall Street's fear gauge, rose to 32.72 points, its highest since May 12.