Stock futures fall ahead of key inflation report
All eyes will be on the April consumer price index Wednesday morning as markets continue to reel amid worries about inflation.
Spotlight Asset Group CIO Shana Sissel, Belpointe chief strategist David Nelson and Thru the Cycle President John Lonski provide insights into today’s markets.
U.S. equity futures are trading lower, the day after a big selloff and ahead of a report on consumer inflation.
The major futures indexes suggest a decline of 0.3% when the Wednesday session begins on Wall Street.
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All eyes will be on the April consumer price index Wednesday morning as markets continue to reel amid worries about inflation.
The Bureau of Labor Statistics is expected to say the CPI rose 0.2% month-over-month in April, below February’s 0.6% spike. On a year-over-year basis watch for prices to jump 3.6%. That would be the fastest growth in almost a decade and up a full percentage point from March’s 2.6% rise. If you factor out volatile food and energy costs, the core consumer price index likely rose 0.3% last month and is expected to increase 2.3% annually.
In Europe, London's FTSE added 0.8%, Germany's DAX gained 0.2% and France's CAC rose 0.2%.
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Asian stock markets retreated Wednesday as investors looked ahead to U.S. data they worry will show inflation is picking up.
The Nikkei 225 in Tokyo tumbled 1.6%, the Hang Seng in Hong Kong gained 0.8% and China's Shanghai Composite Index added 0.6%.
On Tuesday, Wall Street's benchmark S&P 500 index lost 0.9% amid concern inflation might accelerate, hampering an economic recovery and dragging on share prices.
Investor concern is increasing following a price rise for industrial materials including copper and crude oil.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 43389.6 | -55.39 | -0.13% |
| SP500 | S&P 500 | 5893.62 | +23.00 | +0.39% |
| I:COMP | NASDAQ COMPOSITE INDEX | 18791.806377 | +111.69 | +0.60% |
The S&P 500 fell to 4,152.19. The Dow Jones Industrial Average sank 1.4% in its worst day since February. The Nasdaq composite lost 0.1% to 13,389.43.
Commodity prices have been rising, particularly for industrial metals such as copper and platinum, as well as for energy commodities like gasoline and crude oil.
Big technology companies were among the biggest decliners for a second day. Tech stocks get most of their valuation from future profits that might be less valuable if they are eroded by inflation.
Investors have worried about inflation since bond yields spiked earlier this year, though yields have mostly stabilized since then. The yield on the 10-year Treasury held edged up to 1.62% Wednesday from 1.61% on Tuesday.
The Federal Reserve has said the U.S. economy will be allowed to "run hot" to ensure a recovery is established. Despite that, investors worry rising prices might pressure central banks to pull back stimulus and raise near-zero interest rates.
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In energy markets, benchmark U.S. crude gained 76 cents to $66.04 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 36 cents on Tuesday to $65.28. Brent crude, used to price international oils, added 74 cents to $69.28 per barrel in London. It rose 23 cents the previous session to $68.55.
The Associated Press contributed to this report.