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Dow futures slip triple-digits as growth fears grip markets

U.S. stock index futures pointed to a sharply lower open on Monday, as investors digest Friday's massive drop in technology stocks and look to Federal Reserve Chair Janet Yellen's testimony later this week.

Dow futures were down in excess of 150 points in premarket trading as European stocks tumbled over 2 percent, hitting lows not seen since October 2014 amid persistent global growth fears.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

"It appears that softening economic data and disappointing earnings reports are contributing to a negative feedback loop," said chief market analyst at CMC Markets, Michael Hewson.

Investors will also be keen to hear what Fed Chair Janet Yellen has to say this week as she delivers two days of testimony on the economy before congressional committees Wednesday and Thursday.

The Fed chair's testimony comes as markets grow anxious about the health of the economy and the Fed's stated intention to continue on a rate hiking path.

But the markets have also priced out the possibility of a rate hike for this year, over concerns that the weakening economy and faltering financial conditions could give way to a recession. New York Fed President William Dudley this past week highlighted the Fed's concerns about financial conditions.

"Recent events do appear to have caused concern amongst some senior Fed policymakers with notable shifts in tone from Stanley Fischer, Deputy Fed Chairman, and the New York Fed's William Dudley in comments made last week," Hewson said

"It is these concerns about global growth, the Chinese economy and global deflationary forces that has seen equity markets remain under pressure since the beginning of the year with Germany's DAX closing last week at its lowest level since October 2014," he added.

There are several economic reports of importance in the week ahead. The JOLTs report on job openings and turnover Tuesday will be important, after the January employment report showed a big decline in hiring — just 151,000 payrolls — but a surprise pickup in wages and a decline in unemployment to 4.9 percent, due to more workers finding jobs.

Major earnings due on Monday include 21st Century Fox and Yelp.

U.S. equities closed sharply lower on Fridayamid a massive drop in technology stocks and as mixed U.S. employment data raised concerns the Federal Reserve may raise rates this year.

The Nasdaq composite fell 3.25 percent, as Apple and the iShares Nasdaq Biotechnology ETF (IBB) dropped 2.67 percent and 3.19 percent, respectively.