Wednesday's FOMC announcement initiated a sell-off in U.S. equities that rippled across the globe overnight. U.S. equity futures are now responding in kind: markets are set to open more than 2% lower amid a sweeping flight to safety. 

Long-term Treasuries have taken flight since the Fed announced that Operation Twist would include purchasing debt as long as 30 years. The 30-year Treasury yield dropped 14 basis points overnight to 2.86%. Just before the FOMC announcement, its yield was 3.24%. 

The benchmark 10-year yield fell eight basis points overnight to an unprecedented 1.78%.

Even the two-yield yield is a basis point firmer at 0.19% - despite that the Fed will be selling short-term debt.

Say goodbye to any optimism held after equities jumped five days in a row last week. S&P 500 futures are 24.3 points lower at 1,131.50 and Dow futures have shed 226 points to 10,781.

The Fed's concession that there are "significant" downside risks to the economy are apparently the reason for the sell-off.

"The truth hurts," said BMO Capital Markets. "Confidence was already shaky, at best, and the Fed's words only heightened worries about the outlook."

Bad as equity futures are, the European session is far worse: the FTSE 100 is down 4.42%, the CAC-40 is off 4.77%. In Asia, stocks in China closed 2.78% weaker, shares in Japan fell 2.07%, and Hong Kong markets fell 4.85%.

Much of the trading in Europe is a response to two weak surveys: Euro Area manufacturing fell to 48.4 this month, marking the second month of contraction. An index of the services industry also dropped 2.4 points to 49.1, missing expectations and contracting for the first time since August 2009.

Light crude oil has plummeted. It's down 4.38% at $82.16 per barrel. Gold prices fell too, losing 2.83% to $1,757.  The US$ index, meanwhile, is trading at a seven-month high.

Key Events Today:

8:30 - Economists hope the jump in Initial Jobless Claims last week was an aberration. Weekly claims jumped 11k to 428k in the period ending September 10, brining the four-week average to 419,500. Given the statistical noise stemming from Labor Day, the report could be discounted. The median estimate expects claims to now fall 9k to 420k.

"Claims have been grinding higher in recent weeks, although at 428k they are well below the 450k-475k level that would be consistent with recession," said Deustche Bank. "This week's claims figures correspond to the September employment survey week, so they take on added significance."

Citigroup isn't so optimistic, believing claims are will probably remains elevated and push the four-week average to a two-month high.

"While the Labor Department stated that there were no reported Irene-related filings recently, we still posit that the storm may be having some influence," Citi said. "Nonetheless, the worsening claims count is not inconsistent with the deterioration in business sentiment and lackluster economic data of late."

10:00 - The final bit of data hitting the newswires this week is Leading Economic Indicators, a composite gauge designed to track turning points in the economy. In July, the index posted an increase 0.7%; in August, the median estimate is a meagre uptick of 0.1%, with estimates varying from -0.5% to +0.5%.

"The largest drags should come from a drop in the S&P 500 and falling consumer expectations," said Nomura Global Economics, anticipating a 0.3% downfall. "The largest contributors should once again be the interest rate spread and the real money supply (M2), both indicators of the Fed's extraordinary support for the economy."

Citigroup looks for a 0.3% gain, but acknowledges recent gains have reflected huge contributions from rapid real money supply growth and a steep yield curve, and neither signal better economic growth. 

"In the case of money supply, the rise has been driven by a rule change rather than economic forces," Citi said. "Nonetheless, these components more than offset the plunge in stock prices and deterioration in consumer sentiment as the euro area sovereign debt crisis and U.S. political risks intensified. Labor market indicators and business activity gauges were also lackluster in the month."