U.S. stock index futures slipped on Wednesday, after seeing the worst daily losses in two years as investors reeled from disappointing consumer inflation data. Markets will get another data update with producer price inflation data due ahead of the open.
How are stock-index futures trading?
-
S&P 500 futures
ES00
dropped 3 points, or 0.1%, to 3,948 -
Dow Jones Industrial Average futures
YM00
lost 28 points, or 0.1%, to 31,183 -
Nasdaq-100 futures
NQ00
declined 7 points, or 0.1%, to 12,107
In a dramatic session on Tuesday, major indexes logged the biggest daily percentage falls since June 11, 2020. The Dow Jones Industrial Average
DJIA
tumbled 1,276.37 points, or 3.9%, to 31,104.97, the S&P 500
SPX
fell 177.72 points, or 4.3%, to 3,932.69 and the Nasdaq Composite
COMP
slumped 632.84 points, or 5.2%, to close at 11,633.57.
What’s driving the markets?
Investors were seeking some equilibrium ahead of data on August producer price inflation, due at 8:30 a.m. Eastern, which are expected to show a drop of 0.1% following last month’s decline of 0.5%.
In a blow to investors who had been hoping for an easing in high inflation, Tuesday’s data showed the U.S. CPI rising 0.1% in August and the annual rate slowing to 8.3%, against expectations for a monthly fall of 0.1% and a year-over-year rate of 8%. The core inflation rate also climbed by more than expected.
Investors dumped stocks on worries sticky inflation could force the Federal Reserve to keep its aggressive tightening of monetary policy for longer. Some have predicted the Federal Reserve could next week raise interest rates by as much as 1%.
“U.S. inflation is not coming down in a hurry and, despite some encouraging signs elsewhere, it has given hawkish price action in rates globally another lease of life,” said an ING team led by Antoine Bouvet, senior rates strategist.
“This means flatter curves, and higher yields. 10Y Treasurys are now within touching distance of their 3.47% June peak and we do not see much that would stop it from beating that level,” said Bouvet.
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was up 4.8 basis points at 3.462%, while that of the 2-year note
BX:TMUBMUSD02Y
was up 6.8 basis points to 3.813%
Tuesday’s Wall Street selloff spread to Asia, where the Nikkei 225 index
JP:NIK
led losses with a 2.7% drop. The yen
USDJPY
bounced off a low of ¥144.94 after the Nikkei newspaper said the Bank of Japan had conducted a “check” on rates that some see as a precursor to intervention. European stocks
XX:SXXP
were modestly lower.
Companies in focus
-
Shares of Comcast Corp.
CMCSA
bounced 1% in premarket trading Wednesday, off the previous session’s 2 1/2-year closing low, after the cable TV and internet provider boosted its share repurchase program to $20 billion. -
Shares of Uniper SE
XE:UN01
tumbled 20% Wednesday, following a report that the German government is considering fully nationalizing the gas importer or increasing its stake to above 50%.
