We're Going Down...

The selling isn't over.

After Thursday's 317-point plunge in the Dow, Dow futures are down another 98 points.

And there appears to be no shortage of worries out there to exacerbate the selling.

"Disturbing geopolitical events are now added to a list of fundamental investor concerns (QE tapering, a chronic shortage of sensible investment opportunities, weak inflation, lacklustre profit growth, etc.) that in our view were largely being ignored by investors desperate for yield," said Societe Generale's Andrew Lapthorne in a note to clients today. "However this investor complacency encouraged and supported by low asset volatility, buoyant equity prices and extremely low bond yields is increasingly being tested."

So far, futures suggest investors are failing that test.

Markets are getting crushed in Europe with Germany's DAX down a whopping 2.0%.

Amid Thursday's selling, traders focused in on the Q2 employment cost index report, which signaled that wages were rising much faster than expected.

This is a big deal, because it's both a sign of inflation and labor-market tightness, two forces that put pressure on the Federal Reserve to tighten monetary policy sooner than later.

The prospect that the Fed could tighten monetary policy sooner than expected is frequently blamed for causing market volatility. The idea is that if the Fed tightens, then it pulls liquidity out of the credit markets, which indirectly would pull liquidity out of the stock markets.

For now, we wait for the U.S. July jobs report, which will be published at 8:30 a.m. ET. Economists estimate U.S. companies added 230,000 new payrolls during the month.