By Anna Isaac
U.S. stock futures fell Thursday, pointing to a steepening rout in the S&P 500 as investors became unsettled by the Federal Reserve's dour outlook as well as conflicting signals about when vaccines may become available.
Futures tied to the S&P 500 dropped 1.2%, suggesting that the benchmark may fall for a second day after the opening bell in New York. Contracts tied to the Nasdaq Composite fell around 1%, pushing the tech-heavy index further into negative territory for the month.
Federal Reserve Chairman Jerome Powell's comments Wednesday that the economic outlook is "highly uncertain" are weighing on sentiment. Policy makers indicated concern that easy gains from reopening the economy could mask deeper scars among the most vulnerable businesses, with people likely to face longer spells of joblessness. The central bank also signaled that interest rates would stay near zero until 2023.
"The Fed said it would keep rates low for ages. But that's not enough," said James Athey, senior investment manager at Aberdeen Standard Investments. "Not taking away is no longer sufficient for this market. You need to do more, more, more."
Some investors were hoping for more specificity about the forward guidance: how far above 2% are policy makers willing to let inflation go, and for how long? Fed officials didn't offer such details on Wednesday.
Mr. Powell cautioned that it was possible that the lower unemployment rate partly reflects fewer Americans looking for work right now, which means they aren't formally counted among the jobless. He said the economic recovery may take longer than people would like, and reiterated calls for Congress to spend more money to support households and businesses.
Fed officials "saying things about the future is not very relevant for a market whose attention span is 24 hours long," Mr. Athey said. "It's a spoiled child that's had its sweets taken away."
Investors who had been counting on a vaccine to curtail the coronavirus outbreak and allow the economic recovery to pick up pace were also troubled by conflicting comments about the availability of a vaccine.
A top Trump administration health official predicted that a Covid-19 vaccine may not be available to the general public until next summer, but his comments were quickly disputed by President Trump. The director of the U.S. Centers for Disease Control and Prevention, Robert Redfield, said the vaccine would be in "very limited supply" at the end of the year. Mr. Trump said a vaccine would be distributed to the general public immediately.
Separately, Mr. Trump urged congressional Republicans to seek a bigger and more expensive package of coronavirus relief aid. But his comments drew a cool reception from some GOP lawmakers skeptical of a growing price tag.
"There's fatigue on the fiscal and policy front. The Fed didn't take any new steps and no deal has passed Congress," said James McCormick, a strategist at NatWest Markets. "There are signs of a fiscal cliff emerging," he warned, and pointed toward the high number of Americans drawing on unemployment support.
The latest data on jobless claims, due at 8.30 a.m. ET, is expected to have held at a historically high level last week, as layoffs remain elevated. Investors will be watching the data for fresh signs that the labor-market recovery is losing steam six months after the pandemic hit.
In the bond market, the yield on the benchmark 10-year U.S. Treasury edged down to 0.676%, from 0.686% Wednesday.
Overseas, the Stoxx Europe 600 fell 0.6%, with losses led by the technology, banking and mining sectors.
In Asia, major equity benchmarks fell by the close of trading. Japan's Nikkei 225 ticked down 0.7%, while Hong Kong's Hang Seng Index dropped 1.6%.
In commodities, gold fell 1.1% to $1,943.30 a troy ounce.
Write to Anna Isaac at anna.isaac@wsj.com
