Early sell-off is gaining momentum, with the Dow losing 700 points as recession fears mount on Wall Street.

Early selling gained momentum Thursday morning, as the Dow Jones Industrial Average fell 718.9 points during the session. The S&P 500 fell 2.29%, while the Nasdaq Composite lost 2.55%.

– Sarah Maine

Stocks fell sharply on Thursday after November retail sales fell more than expected, stoking fears that the Federal Reserve’s relentless interest rate hikes are tipping the economy into recession.

The Dow Jones Industrial Average fell 336 points, or 0.99%. The S&P 500 fell 1.16%, while the Nasdaq Composite lost 1.28%.

– Sarah Maine

The story for the next year for the stock market, said Mike Wilson of Morgan Stanley, is about earnings, which will drop significantly. He said in an interview withSquawk box” Thursday.

“People assume earnings will decline, but that’s how big that decline is and how quickly it’s happening — we think that’s where the surprise is,” said Wilson, the firm’s US equity analyst. “It’s the negative operating leverage that we’re seeing from lower inflation…that’s going to hurt margins, and that’s regardless of whether or not there’s a recession.”

It expects an 11% decline in year-over-year growth for Standard & Poor’s 500 companies next year. While his year-end target for the index is 3,900, he expects it It drops to between 3,000 and 3,300 in the first quarter.

Sluggish earnings will be caused by a whole host of causes, Wilson said, including an overextended economy, destroyed demand from rising prices, and the Federal Reserve raising interest rates this year. There will also be a backlash from companies.

“At some point, trust fails and companies stop submitting because they’re like, ‘We have to work around the holes a little bit,'” he said.

– Michelle Fox

Two points of economic data released on Thursday showed declines indicating divergences in parts of the economy.

Jobless claims fell again to 211,000 for the week ending Dec. 10, down 20,000 from the previous week according to the Labor Department. Continuing claims for the week ending Dec. 3 were 1,671,000, roughly the same as last week’s report.

The Philadelphia Manufacturing Index rose 6 points but remained negative at -13.8, indicating contraction. It is the fourth consecutive negative reading for the index, and the sixth in seven months.

– Carmen Renick

Retail and food service sales fell 0.6% in November after rising 1.3% in the previous month, according to the Commerce Department. That was less than the Dow Jones estimate of a 0.3% decline.

Excluding autos, retail sales fell 0.2%, below Dow Jones’ estimate for a 0.2% increase in spending.

– Sarah Maine

These are the companies making headlines before the bell:

• Tesla (TSLA) – Tesla fell 1.2% in pre-market trading after a SEC filing showed Elon Musk It sold another $3.6 billion in stock. The stock is down 55% year-to-date through Wednesday.
• Warner Bros. Discovery (WBD) – Warner Bros. Discovery projected costs for the planned content cancellation by $1 billion to a total of $3.5 billion. The media company has been implementing cost-cutting measures since the merger AT&TWarnerMedia and Discovery unit earlier this year. Warner Bros. lost. Discovery 1.2% in the primary market.
• Linar (LEN) – Lennar fell 2.6% in the pre-market after anticipating a slowdown in new home orders, as a result of higher mortgage rates. The homebuilder also reported lower-than-expected earnings for the latest quarter, though revenue was slightly above analyst expectations.

Check out the full list here.

– Peter Shaker

Bank of England It raised the benchmark interest rate by half a percentage point on Thursday, reflecting the Fed’s move yesterday.

The Bank of England’s main interest rate is now 3.5%. The central bank carried out an increase of three-quarters of a point in November.

Inflation eased slightly to 10.7% in the UK in November. The Bank of England said it expects UK GDP to fall 0.1% in the fourth quarter.

– Jesse Pound, Elliot Smith

On Wednesday, Federal Reserve officials indicated the possibility of raising the target base interest rate above 5% in 2023. Markets did not seem convinced.

Fed funds rate futures imply a “final rate,” or endpoint, for increases of 4.88% by next summer, according to CME Group data Thursday morning. This contrasts with the Fed’s “dot chart” of individual members’ expectations, which put the median forecast for the final interest rate at 5.1%.

The pricing also indicates a 72% chance of a quarter-percentage-point hike in the benchmark interest rate in February, which would be another retreat from the jittery pace the Fed has set for much of 2022. On Wednesday, the central bank raised the benchmark interest rate by half a point. to the 4.25%-4.5% target range, a move that came after four consecutive increases of three-quarters of a point.

Morgan Stanley said it expects the Fed to raise interest rates in February, in large part because economic weakness will prevent further tightening.

“Job gains are in focus, and we continue to look for a significant slowdown in the coming months, which we expect will stop the Federal Reserve from implementing increases last February,” the company said in a note Thursday morning.

Markets expect the Fed to move the funds rate to a range of 4.75%-5% by mid-year, and then cut half a point by the end of 2023.

– Jeff Cox

China is returning to a greater focus on economic growth with top officials crafting a plan for 5% GDP growth next year. The Wall Street Journal reportedaccording to people familiar with the matter.

The plan includes easing Covid restrictions and boosting the real estate sector, the report said.

Economic data in China has been weak recently, which has raised concerns about a global recession. Trade data for November released last week came in lower than expected.

Crude oil Barely higher for the year on fears of a global recession after trading above $120 a barrel earlier in the year.

If China shifts to focus more on growth, that could help the stock and commodity outlook for 2023.

– John Milloy

Western Digital The shares fell more than 4% in the premarket after a downgrade to sell from Goldman Sachs.

According to the bank, “continued shrinkage in NAND, and historically low gross margins by extension, could pose a risk to WD’s competitive position, particularly as net debt to TTM EBITDA rises over the coming quarters.”

CNBC Pro subscribers can read more here.

Sam Sabine

Tesla fell more than 2% after nearly selling out CEO Elon Musk $3.6 billion in shares of the electric car maker. According to VerityData, it has sold 94,202,321 shares so far this year at an average price of $243.46 per share for pre-tax revenue of about $22.93 billion.

Earlier this year, he told his social media followers that he had no plans to sell any more shares after April 28th.

Fred Imbert, Laura Kolodny

Sterling pound It fell 0.9% against the US dollar on Thursday morning to trade just above $1.23, as general risk-off sentiment spread across the currency markets, boosting the US dollar as a traditional safe haven.

The euro It was also down 0.7% against the dollar at just over $1.06.

The Bank of England He faces the unenviable task of navigating a slowing economy, very high inflation, and a very tight job market.

The market is broadly pricing in a 50 basis point hike on Thursday to raise the bank’s benchmark rate to 3.5%, a slowdown from the 75 basis point increase in November, the largest in 33 years.

After reaching a 41-year high in October, the annual rise in UK CPI slowed to 10.7% in NovemberNew numbers revealed Wednesday.

Read the full story here.

– Elliott Smith

The Swiss National Bank raised its benchmark interest rate on Thursday for the third time this year, to 1%.

The central bank said it was looking forward to countering “increasing inflationary pressure and increasing inflationary spread” with the move.

Inflation in the country remains well above the SNB’s 0-2% target, but notably below the high. rates of neighboring European countries. Switzerland’s inflation rate held steady at 3% last month, having fallen from a three-decade high of 3.5% in August.

Read the full story here.

– Hannah Ward Glinton

China’s industrial production for November grew 2.2%, after seeing a 5% growth in October, according to official data. This is lower than the 3.6% growth forecast in a Reuters survey.

Retail sales fell 5.9% year-on-year, more than expectations for a 3.7% decline in a Reuters survey and a 0.5% decline in the previous month.

– Jihe Lee

Shares of Lennar fell more than 2% in extended trading after the homebuilder’s quarterly financial results.

Lennar posted earnings of $4.55 per share, down from estimates of $4.90, according to Refinitiv. The company’s forecast for new orders also missed estimates. However, revenue came in higher than expected.

CEO of DoubleLine Capital Jeffrey Gundlach He said he thought The Federal Reserve should stop raising interest rates after the recent hike As the economy is already weakening.

“I think they shouldn’t do any more hikes anymore,” Gundlach said on CNBC.Close the additional bellWednesday, adding that the central bank may increase interest rates by 25 basis points.

The so-called bond king said that the inflation data in the next six months will strongly encourage the central bank. Gundlach expected the CPI to fall to 4.1% in June from a peak of 9.1%. The index rose 7.1%. Last month compared to last year, a rise less than expected.

“I think there has been some progress on inflation,” Gundlach said. “Nobody really talks about all these wild price increases anymore. With the economy weakening, I think the rate of inflation will come down faster than most economists do.”

– Yun Lee

Stock futures opened little changed Wednesday night as investors digested the latest Federal Reserve policy update.

Dow Jones Industrial Average futures rose 20 points, or 0.06%. Futures linked to the S&P 500 rose 0.07%. Nasdaq 100 futures also hovered above the flat line, at 0.03%.

– Tanaya McHale