As the era of cheap money draws to a close and a cycle of higher interest rates sets in, investors for much of the year have been selling equities, pushing the benchmark S&P 500 to close out its worst first six months since 1970.
Federal Reserve policymakers have been making a case for a second 75-basis points interest rate hike in July despite signs of slowing economic growth, leaving investors assessing the hit to corporate earnings ahead of quarterly reporting season.
"Investor confidence is evaporating right now. The Fed is saying they are going to raise interest rates, and if they want the inflation controlled, the economy will go through some pain in the short term and in the next at least six to 12 months," said Kunal Sawhney, chief executive at research firm Kalkine.
"Volatility is going to be there in the second half of the year, given the recession risks have intensified."
Meanwhile, latest data showed manufacturing activity stalled in Asia and production fell in Europe as higher prices and a darker economic outlook left consumers wary of making purchases.
The Institute for Supply Management's survey, due at 10:00 a.m. ET, is expected to show U.S. factory activity eased further in June.
Markets saw a turbulent first-half as fears about aggressive interest rate hikes, geopolitical uncertainty, prolonged supply-chain snarls and COVID-19 lockdowns in China weighed on sentiment.
In the previous session, all three indexes posted their second straight quarterly declines. The Dow suffered its biggest first-half percentage plunge since 1962 and the tech-heavy Nasdaq recorded its worst-ever first six months.
At 08:47 a.m. ET, Dow e-minis were down 73 points, or 0.24%, S&P 500 e-minis were down 7 points, or 0.18%, and Nasdaq 100 e-minis were down 25.5 points, or 0.22%.
Micron Technology Inc dropped 4.7% in premarket trading as the memory-chip firm predicted current-quarter revenue below market expectations, triggering concern the chip industry was turning toward a down cycle.
Other chip stocks Qualcomm, Advanced Micro Devices and Texas Instruments were down between 0.7% and 1.4%.
Facebook-owner Meta Platforms Inc slipped 0.6%. The company has cut plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees, warning them to brace for a deep economic downturn.
Kohl's Corp tumbled 18.6% as the department store chain called off its sale to Vitamin Shoppe-owner Franchise Group, blaming a downturn in market conditions.
(Reporting by Amruta Khandekar in Bengaluru; Editing by Arun Koyyur)
By Amruta Khandekar