U.S. stock futures struggled for direction on Wednesday, leaving Wall Street potentially on course for a third consecutive day of losses, as investors fret that soaring inflation is damaging the world’s biggest economy and battering corporate profits.
How are stock-index futures trading?
-
S&P 500 index futures
ES00
were little changed at 3,826.5 -
Dow Jones Industrial Average futures
YM00
rose 60 points, or 0.3%, to 30,993 -
Nasdaq-100 futures
NQ00
were virtually flat at -11,673
On Tuesday, the Dow Jones Industrial Average
DJIA
fell 491.27 points, or 1.6%, to end at 30,946.90. The S&P 500
SPX
fell 2% to close at 3,821.55. The Nasdaq Composite
COMP
dropped 3% to 11,181.50.
All three booked their worst daily percentage declines since June 16, according to Dow Jones Market Data.
What’s driving markets?
On U.S. economic data, the first-quarter GDP was revised to show 1.6% decline, compared with the prior 1.5% drop.
Investors are also expecting Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde, Bank of England Gov. Andrew Bailey and Augustin Carstens, head of Bank for International Settlements, to speak at an ECB conference at 9 a.m. ET.
Equities are limping toward the end of a miserable first half of the year. The S&P 500 is down 19.6% so far in 2022, hit by concerns that inflation rates at multidecade highs are badly damaging household sentiment and that the Federal Reserve’s response to surging prices may tip the economy into recession.
Read: What’s next for the stock market after the worst 1st half since 1970? Here’s the history.
On Tuesday, the Conference Board’s consumer-confidence index dropped in June to a 16-month low of 98.7, with consumers’ outlook on the state of the economy at the most cautious in nearly 10 years. The news helped turn early gains for Wall Steet into heavy losses, with the Nasdaq Composite shedding 3%, leaving the tech-heavy index nursing a loss of 28% for the year to date.
“Last week, U.S. equity markets rallied on the back of the arcane logic that a U.S. recession would mean a lower terminal Fed funds rates and thus, was bullish for stocks… That premise was boosted by weak Michigan Consumer Sentiment data,” said Jeffrey Halley, senior market analyst at OANDA, in a note to clients.
On Tuesday, “even weaker U.S. Conference Board Consumer Confidence data provoked the opposite reaction, with U.S. stocks plummeting,” he added.
See: Wall Street’s favorite stock sector has potential upside of 43% as we enter the second half of 2022
Wall Steet’s dive left Asian and European bourses floundering. Hong Kong’s Hang Seng
HK:HSI
fell 2% and the Nikkei 225
JP:NIK
in Japan slipped 0.9%. China’s Shanghai Composite
CN:SHCOMP
shed 1.4% after president Xi Jinping reiterated that the regime’s strict COVID-19 policy was “correct and effective.”
The comments added to worries that supply constraints in China could exacerbate global inflationary pressures. And such concerns were illustrated in Spain on Wednesday, where data showed prices rising by 10.2% in June, their fastest pace in 37 years. Europe’s Stoxx 600
XX:SXXP
fell 0.8%.
Oil prices crept higher, with WTI crude
CL,
up 1.5% to $113.41 a barrel.
The yield on the US 10-year Treasury note
BX:TMUBMUSD10Y
eased 1.3 basis points to 3.167%.
Companies in focus
-
Shares of Pinterest Inc.
PINS
rallied 4.6% in premarket trading Tuesday after the social-media company said co-founder Ben Silbermann is stepping down as chief executive and is being replaced by an e-commerce executive from Google. -
Bed Bath & Beyond Inc.
BBBY
shares sank 13% in Wednesday premarket trading after it announced disappointing fiscal first-quarter results and the ouster of its chief executive, Mark Tritton. -
General Mills Inc.
GIS
shares dropped 1.1% despite that it beat quarterly expectations. The company posted fourth-quarter net income of $822.8 million, or $1.35 per share, nearly double $416.8 million, or 68 cents per share, last year. Adjusted EPS of $1.12, ahead of the FactSet consensus for $1.01 per share.
