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Bad news is bad news in the equity market, particularly small caps.
S&P 500 futures are down 1.5% ahead of the open while Nasdaq futures are down 2.2% and the Russell 2000 is down 3%.
There was time when hopes for Fed cuts could buoy the market but it increasingly looks like the Fed is behind the curve. Even five straight meetings with quarter point cuts would only get Fed funds to 4.00-4.25%, a level that's still restrictive. If the economy is now entering a recession, that won't offer much help.
Looking at S&P 500 futures, today's drop breaks the July lows. A 50% retracement of the April-July rally would target 5341, a further 1% decline from here.
Spoos
