(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.

After poor results by retailer, Wednesday’s percentage loss for the and the was their largest one-day since June 2020. Target Corp (NYSE: ) highlighted the severity of inflation on consumers.

Premarket trading for Cisco Systems Inc (NASDAQ) fell 12.5% due to a reduction in revenue from 2022 by the networking gear manufacturer.

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.

The sell-off was led by high-growth stock as investors struggle to adapt to tightening economic conditions. 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-rich peer Nasdaq.

Goldman Sachs’ (NYSE:) strategists predicted that there would be a 35% chance of the U.S. entering recession within 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 outlook with a mild U.S. depression now in sight. This is according to its base case scenario, which was for 2022-early 2023.

Megacaptech and growth shares like Apple Inc (NASDAQ:) Microsoft Corp Premarket trading saw a decline of 1.1% to 2.4% for Alphabet, Amazon.com and Tesla.

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

At 06:22 AM. ET were down 407 point, or 1.29 %, 53 points (or 1.35%), and 169 points (or 1.42%) at 06:22 a.m.

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