By Liz Moyer
Investing.com -- Stocks got clobbered on Thursday as investors soaked in the Federal Reserve's message that interest rates will stay higher for longer.
The Fed is determined to quash inflation, and said it would keep rates elevated through next year, rather than a pause or a pivot that some investors had been hoping for. The central bank's message also said its benchmark rate could rise above 5%, which is higher than expectations just a few weeks ago.
Policymakers see inflation remaining elevated, economic growth slowing more than previous estimates, and unemployment rising.
That means the economic pain will continue into 2023. Investors have feared that the Fed's aggressive stance might tip the economy into a recession next year, and they have fled riskier assets as a result. That is weighing on growth stocks, with the Nasdaq down more than 3%.
Softer-than-expected retail sales for November also cast a gloomy shadow over holiday sales, which are about halfway through their season.
Here are three things that could affect markets tomorrow:
1. Darden earnings
While shoppers are holding back on discretionary purchases, they are spending money in restaurants. Darden Restaurants Inc (NYSE:DRI), which include the Olive Garden and LongHorn Steakhouse, is expected to report earnings per share of $1.43 on revenue of $2.43 billion.
2. Winnebago results
Recreational vehicles grew in popularity during the pandemic when people wanted to hit the road after being cooped up at home, but the trend could reverse if consumers opt for travel in other ways. Winnebago Industries Inc (NYSE:WGO) is expected to report earnings of $1.82 on revenue of $869.3 million.
3. Manufacturing and services
More data on manufacturing and services growth for November is due out at 9:45 ET (14:45 GMT). Services PMI is expected to be 46.8, while manufacturing PMI is expected to be 47.7.