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U.S. stock futures on Friday were pointing to a second straight down day, as a spate of hot economic data is lifting expectations for Federal Reserve interest-rate hikes.

What’s happening
  • Dow Jones Industrial Average futures
    YM00,
    -0.47%
    fell 194 points, or 0.6%, to 33545.

  • S&P 500 futures
    ES00,
    -0.65%
    dropped 32 points, or 0.8%, to 4068.

  • Nasdaq 100 futures
    NQ00,
    -0.88%
    decreased 127.25 points, or 1%, to 12355.

On Thursday, the Dow Jones Industrial Average
DJIA,
-1.26%
fell 431 points, or 1.26%, to 33697, the S&P 500
SPX,
-1.38%
declined 57 points, or 1.38%, to 4090, and the Nasdaq Composite
COMP,
-1.78%
dropped 215 points, or 1.78%, to 11856.

What’s driving markets

Comments from two regional Fed presidents on Thursday have led traders to begin to price in the possibility that the Fed may hike by more than a quarter-point at its March meeting. There’s now an 18% chance of a half-point rate hike at the March 22-ending meeting, from 9% a week ago, according to the FedWatch tool from the CME that is based on trading in fed funds futures contracts.

Economists at Goldman Sachs late on Thursday added a rate hike in June to their Fed interest-rate forecasts, with the investment bank now forecasting quarter-point increases in March, May and June.

“After a reassuring week, the U.S. market appeared to suffer a renewed bout of interest rate nerves. Yet it was blamed on a PPI number distorted by weather effects, and comments from two Fed officials who do not currently have a vote on the policy decisions,” said Ian Williams, a strategist at U.K. broker Peel Hunt.

The economic calendar for Friday includes two more Fed officials, Richmond Fed President Tom Barkin and Fed Gov. Michelle Bowman, ahead of the three-day weekend in observance of Washington’s Birthday on Monday.

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