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Market Snapshot: Dow futures drop over 300 points as selling gathers pace after Fed minutes

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U.S. stock futures slumped on Thursday, a day after minutes from the Federal Reserve’s rate-setting committee indicated its bond buying program was on its last legs.

What’s happening

* Futures on the Dow Jones Industrial Average
YM00,
-1.04%

fell 327 points;

* Futures on the S&P 500
ES00,
-0.98%

lost 0.9%;

* Futures on the Nasdaq 100
NQ00,
-0.84%

retreated by 0.8%.

On Wednesday, U.S. stocks suffered their worst single session in a month. The Dow
DJIA,
-1.08%

fell 382 points, the S&P 500
SPX,
-1.07%

lost 1.1% and the Nasdaq Composite
COMP,
-0.89%

fell 0.9%.

What’s driving markets

Investors continued to be rattled by the release of the Fed minutes, even though its message — that tapering will start this year — was well choreographed in speeches and articles citing insiders ahead of the release.

“While the formula provided could in principle be consistent with a taper decision in September (particularly given the strong July employment report that came after the FOMC meeting), the overall tone of the debate – including multiple references to the delta variant – seem more consistent with a more methodical approach in which the Fed provides a clear signal in September that a taper decision is coming in November. That was and remains our call,” said economists at Evercore ISI.

Also noteworthy was a U.K. study, from the University of Oxford based on real-world data, that showed diminished effectiveness from coronavirus vaccines to the delta variant. After four to five months, the study found that two doses of the vaccine from Pfizer
PFE,
-2.20%

and BioNTech
BNTX,
-0.62%

was as effective as two Oxford-AstraZeneca
AZN,
+0.15%

jabs.

Robinhood Markets
HOOD,
+6.71%

was set to retreat after the online broker’s cautious outlook on the third quarter.

Other markets

The selling was particularly intense in Europe, where miners dived nearly 5% to send the Stoxx Europe 600
SXXP,
-2.14%

down by 2%.

The yield on the 10-year Treasury
TMUBMUSD10Y,
1.227%

fell to 1.22%.

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