U.S. stock futures jumped on Wednesday, after the July U.S. consumer-price index report showed a slowdown of headline inflation from June, primarily thanks to falling energy prices.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+1.69%
rose 67 points, or 1.6% to 4,191 -
Dow Jones Industrial Average futures
YM00,
+1.27%
added 410 points, or 1.3% to 33,144 -
Nasdaq-100 futures
NQ00,
+2.31%
gained 301 points, or 2.3% to 13,336
On Tuesday, the Dow Jones Industrial Average
DJIA,
fell 0.2% to 32774, the S&P 500
SPX,
declined 0.4% to 4122 — its fourth-straight losing session — and the Nasdaq Composite
COMP,
dropped 1.2%, to 12493, its third consecutive drop.
What’s driving markets
The July U.S. consumer-price index (CPI) report released at 8.30 a.m. Eastern showed a cooling headline inflation and a sticky core inflation.
The consumer price index was unchanged in July, compared with the 1.3% gain in the prior month, according to the Labor Department. Economists polled by The Wall Street Journal had estimated a 0.2% gain in July.
The rate of inflation in the 12 months ended in July slowed to 8.5% from a 41-year high of 9.1% in June.
The closely-watched core measure of inflation that omits volatile food and energy prices rose 0.3% in July, a slower pace from a 0.5% gain in the prior month. The 12-month rate remained steady at 5.9%.
Investors have been eager to see that inflation has peaked. Equities have been roiled in 2022 but despite bouncing off its mid-June low, the S&P 500 index remains down 13.5% for the year to date. The drop has been driven by fears that multidecade-high inflation will batter consumer confidence, cause the Federal Reserve to hike borrowing costs aggressively and tip the U.S. economy into recession.
After the inflation report was released, the dollar index
DXY,
was down 1% to 105.28 and U.S. 10-year Treasury yields
TMUBMUSD10Y,
eased 7.9 basis points to 2.705%.
Damping sentiment is a recent rash of poorly-received corporate news. There is particular concern about the health of the semiconductor sector after Micron
MU,
followed Nvidia
NVDA,
with a warning about revenues. The PHLX Semiconductor Index
SOX,
fell 4.6% on Tuesday and is down 27.4% so far in 2022.
In addition, a recent rally in badly battered former bull market darlings has come to a juddering halt in the past few sessions, also hurting retail investor confidence. And some are due for more pain on Wednesday.
Shares in crypto exchange Coinbase
COIN,
were down a further 5.5% in premarket action after reporting a billion dollar second quarter loss, and Roblox
RBLX,
the videogame group, plunged 17.4% after a key sales metric declined for the second consecutive quarter.
Companies in focus
-
Sweetgreen Inc.
SG,
-4.21%
shares plunged 22.8% after the salad restaurant chain’s second-quarter financial results missed Wall Street’s expectations. - Shares of Plug Power Inc. PLUG dipped 0.6% in premarket trading Wednesday after the hydrogen fuel-cell company fell shy of expectations with its latest revenue and earnings.
-
Wendy’s Co.
WEN,
-0.47%
shares lost 0.5%, after the fast-food company posted weaker-than-expected revenue for the second quarter.
How are other assets faring
-
Oil futures were softer, with U.S. WTI
CL.1,
-0.21%
off 0.8% to $89.73 a barrel. -
Gold
GC00,
-0.08%
fell 0.3% to $1,807 an ounce and bitcoin
BTCUSD,
+3.26%
lost 0.8% to $22,964. -
Asia markets were softer following Wall Street’s overnight lead and after data showed China’s inflation at a two-year high. The Shanghai Composite
SHCOMP,
-0.54%
lost 0.5%, Hong Kong’s Hang Seng
HSI,
-1.96%
shed 2.2% and Japan’s Nikkei 225
NIK,
-0.65%
fell 0.65%. In Europe the Stoxx 600
SXXP,
+0.83%
retreated 0.2%.
