Business

Futures drop after inflation data


U.S. stock futures fell on Thursday, indicating a turbulent second day in the market as U.S. inflation rose more than expected.

Futures tied to the S&P 500 fell 0.6% after the broad market index closed down 1.7% on Wednesday. Nasdaq-100 futures fell 1%, indicating more losers in tech stocks after the opening bell.

Stocks are under pressure due to concerns about the Federal Reserve pulling back on easy monetary policy as it combats the recent wave of high inflation. A data release on Wednesday shows that consumer prices have increased less faster than last monthbut still in at a faster rate than economists had expected.

This has raised concerns that the central bank will raise interest rates at an aggressive pace, weighing on markets accustomed to loose monetary policy. So far, the S&P 500 has lost more than 4.5% this week. The Nasdaq Composite fell to its lowest level since November 2020.

“The market is concerned that central banks, by trying to contain inflation, could trigger a recession or at least a sharp recession. When you look at yesterday’s CPI data, it’s probably a little early to call a peak in inflation,” said Luc Filip, head of investment at SYZ Private Banking.

Yields on the standard 10-year Treasury note fell to 2.832% from 2.918% on Wednesday, falling for the fourth consecutive session. Yields and bond prices move in opposite directions.

“The profitable markets have turned for a likely hard landing and in the direction of further tightening from the Fed,” said Karim Chedid, investment strategist at BlackRock. BlackRock. The drop in long-term bond yields shows that growth expectations have fallen, he said.

The producer price index, another measure of inflation, will be available at 8:30 a.m. ET. Economists forecast that the prices suppliers charge businesses will ease in April. Weekly jobless claims are also scheduled around the same time.

The dollar strengthened for the fifth day in a row, with the WSJ Dollar Index rising 0.2% to its highest level since March 2020.

The cryptocurrency continues to plunge, with bitcoin dropping more than 10% to $25,400, its lowest level since December 2020, before dropping to around $28,000. It has lost more than 60% of its value since peaking last November. Ether fell nearly 9% on Wednesday to trade around $1,850.

Earnings season continues to be in full swing, with WeWork,

Six Flags Entertainment

and

Endeavor group

set to report on Thursday.

In pre-market trading,

Besides meat

down 23% after the meat substitute company reported The loss is bigger than expected in the previous quarter due to higher spending.

Coinbase

fell another 8%, extending its slide after losing more than a quarter of its value on Wednesday.

Walt Disney

down 4.7% after the company reported higher operating loss and their chief financial officer said they may not be able to sustain their current growth in streaming subscribers. Electric car company

Rivian Automotive

up 2.9% after executives said they expect supply chain problems should ease by the end of the year.

Oil prices slid after US crude inventories rose more than expected. Global benchmark Brent crude fell 2.1% to trade at $105.24 a barrel. Prices have also been affected by the slow progress of European Union negotiations over a possible ban on Russian crude oil imports, according to analysts at ANZ.

Traders worked on the floor of the New York Stock Exchange on Wednesday.


Photo:

BRENDAN MCDERMID / REUTERS

Abroad, the Stoxx Europe 600 continental market fell 2.2%. British investment firm Hargreaves Lansdown tumbled 10% after it reported a decline in assets under management.

European government bonds rallied, with German 10-year yields falling to 0.881%, their lowest this month.

A benchmark for Western European natural gas prices rose 13% after Russia sanctioned several companies in Europe’s gas supply chains on Wednesday night, increasing the risk of disruption.

In Asia, most of the major benchmarks fell. Hong Kong’s Hang Seng Index fell 2.2% and Japan’s Nikkei 225 fell 1.8%.

Hong Kong’s monetary authority intervenes in the foreign exchange market to protect its currency rate for the first time in three years, spending $202 million.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8



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