Stock futures slide after GDP contracts for a second time, raising recession fears

Stock futures fell on Thursday after the latest GDP reading showed a slight decrease while investors continued to digest the Federal Reserve's latest monetary policy decision.

Futures tied to the Dow Jones Industrial Average slipped 61 points, or 0.2%. S&P 500 futures lost 0.2%, and Nasdaq 100 futures dropped 0.4%. All of the major averages are still on pace for a winning week and their best month of 2022.

The latest GDP reading showed U.S. economic growth fell 0.9% in the second quarter, the Bureau of Economic Analysis reported. The Dow Jones estimate was for a gain of 0.3%. First-quarter GDP declined by 1.6%.

Investors have grown increasingly concerned in recent months that the Fed's attempts to tame surging prices would move the economy closer to a recession. Many characterize a recession as having two back-to-back negative quarters of economic growth. It's more nuanced than that though, according to the National Bureau of Economic Research, the official arbiter of recessions, which considers several additional factors.

Fed Chair Jerome Powell on Wednesday said during a press conference he does not believe the economy has entered a recession because "there are too many areas of the economy that are performing too well."

Shares of Meta Platforms dipped 5.9% in premarket trading on the back of disappointing quarterly results, while Ford gained more than 5% after a beat on the top and bottom lines, and as it raised its dividend. Teladoc cratered more than 25% after taking another large goodwill charge.

The moves come on the heels of a broad-based rally Wednesday after the Fed's latest monetary policy decision, as investors continued to bet on whether the central bank can halt surging prices without pushing the economy into a recession.

Following the rate hike from the Fed, DoubleLine Capital's CEO Jeffrey Gundlach told CNBC's "Closing Bell Overtime" he believes the central bank is no longer behind the curve on inflation and Powell has regained credibility.

"This market reaction seems less of a sugar high than the prior two in June and May," Gundlach said.

The Dow jumped more than 400 points in the previous session, while the S&P 500 and Nasdaq Composite added 2.6% and 4.06%, respectively.

All S&P 500 sectors ended the day higher, with communications services posting its best daily performance since April 2020.

"For the most part, what's really driving this move is that the economy is still performing okay and it looks like the Fed is probably going to slow the pace of tightening down by the next policy meeting," said Ed Moya, Oanda's senior market analyst.

On the earnings front, investors are looking ahead to results from Apple, Amazon, Intel and Roku slated for after the bell.