(Reuters) – U.S. Stock Index futures dropped on Thursday as Wall Street investors focused on the effects of increasing inflation on U.S. economic growth and corporate earnings.

On Wednesday, the and suffered their worst one-day percentage drop since June 2020. This was despite poor retailer results. Target Corp (NYSE: ) highlighted the severity of inflation on consumers.

Cisco Systems Inc (NASDAQ 🙂 plunged 12.5% during premarket trading, as the networking gear company cut its 2022 revenue growth forecast due to China lockdowns.

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.

Investors scrambled to adapt to tighter financial conditions. High growth stocks were the main culprits of this sell-off. It is now down 18.2% since its Jan. 3 record closing and below 20% would confirm a bear market. This will allow it to join its tech-heavy counterpart Nasdaq.

Goldman Sachs’ (NYSE:), strategists predicted that there would be a 35% chance of the U.S. entering recession in the following two years. Morgan Stanley According to the latest research by (NYSE:), 25% of people believe that there will be a recession within 12 months.

Wells Fargo (NYSE: ) Investment Institute reduced Wednesday’s economic forecasts with a slight U.S. recession looming in its base case scenario, which is for the 2022-early 2023 period.

Growth shares and megacap tech such as Apple Inc (NASDAQ) Microsoft Corp Premarket trading was dominated by Amazon.com (NASDAQ) and Alphabet.com (NASDAQ) Inc.

Morgan Stanley fell 1%, leading declines in the major banks.

At 06:22 AM. ET fell 407 points or 1.29%. They were also down 53 points or 1.35% and were down by 169 points or 1.42%.

CBOE volatility index also known as Wall Street’s fear gauge rose to 32.72, their highest point since May 12.