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Equity futures are falling as investors continue to think about hot inflation data




US stock futures fell in pre-market trading on Thursday after another decline in markets as investors digested more red-hot inflation data which showed that price levels remained high in April.

Futures related to the S&P 500 fell 0.4% after the index fell to 3,935.18, or the lowest level since March 2021. The S&P 500 is down more than 17% in the first 90 trading days of 2022, marking the second worst start to a year, according to data from Compound Capital Advisors. Contracts on the Dow Jones Industrial Average ticked down 0.3% after falling 300 points, or just over 1% in the previous session, and Nasdaq Futures fell 0.8%.

The movements are based on a number of sharp losses in the stock markets and follow the April consumer price index (CPI) until Wednesday, which showed an inflation rate that remained close to 40 years high despite a marginal decline from last month. Furthermore, the so-called core price index, which excludes the volatile food and energy categories, came higher than economists had expected, which raised concerns among investors that high prices could persist.

April̵[ads1]7;s snapshot of inflation across the United States comes as investors gauge how aggressively the Federal Reserve will intervene to curb rising price levels through monetary tightening, including rate hikes. Uncertainty surrounding the central bank’s next move has spurred turbulence across risk assets, sending all three major indices to their lowest trading level so far this year.

“Inflation appears to be anchored in many areas of the economy, and whether or not we have seen the inflation peak, a sustained slow decline will be more problematic for the Fed to simultaneously cool inflation without tipping the economy into recession,” said Charlie Ripley, senior investment strategist. at Allianz Investment Management, said in an email Wednesday.

Cleveland Fed President Loretta Mester told Yahoo Finance on Tuesday that interest rate hikes of 50 basis points are likely in the next two Federal Reserve policy meetings, while leaving a 75 basis point increase on the table as the central bank raises inflation. -minding efforts.

“It’s going to be challenging, no doubt, because things are happening on both the supply side and the demand side,” Mester said. “But the risk of inflation remaining high becomes even more risky when we continue because of inflation expectations, so it is very important that we are committed to doing what we have to do.”

Peter Essele, head of portfolio management, Commonwealth Financial Network, said that if inflation flattens out in the second half of the year, there will be less pressure on the Fed to combat high price levels with aggressive monetary policy, “which opens up the possibility of a soft landing in the economy. as opposed to the crash and combustion that markets have been pricing in lately. “

“The second half of the year could be a strong period for equities and bonds if inflation continues to decline and the extent of interest rate increases falls below expectations,” Essele said in a note. “At the moment, investors are pricing in a doomsday scenario with inflation and missing the forest for the trees.”

07:15 ET: Futures fall as sales persist amid inflation, interest rate concerns

Here are the main features of early futures trading Thursday before the market opened:

  • S&P 500 futures (NO = F): -16.00 (-0.41%) to 3,914.25

  • Dow futures (ÅM = F): -90.00 (-0.28%) to 31,653.00

  • Nasdaq futures (NQ = F): -90.25 (-0.75%) to 11,879.50

  • Rough (CL = F): – $ 1.35 (-1.28%) to $ 104.36

  • Gold (GC = F): – $ 6.80 (-0.37%) to $ 1846.90 per ounce

  • 10-year Treasury (^ TNX): 0.00 bps to give 2.9210%

06:30 ET: Grocery Delivery Platform Instacart IPOs

Instacart Inc., the largest online grocery delivery service in the United States, has confidentially filed documents for an initial public offering, according to a Bloomberg News report.

The company reportedly works with banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the go, according to Bloomberg, citing people familiar with the matter, who indicated that a stock exchange listing could happen as soon as this year, although the timing may change.

Instacart, which grew sharply during the pandemic when people turned to online grocery shopping, has recently seen a slowdown in growth following the COVID boom as consumers return to personal supermarket visits.

The company revealed in March that it cut its valuation by around 40% to $ 24 billion. Instacart was previously valued at $ 39 billion in a March 2021 funding round from firms including Andreessen Horowitz, Sequoia Capital and D1 Capital Partners, as well as Fidelity Management & Research Co. and T. Rowe Price Associates Inc., Bloomberg reported.

Equity futures are falling as investors continue to think about hot inflation data

Smartphone with displayed Instacart logo is seen in this illustration taken March 25, 2022. REUTERS / Dado Ruvic / Illustration

18:14 ET Wednesday: Stock futures rise higher after continued losses in stocks

Here’s where stock futures were in extended trading ahead of Wednesday night:

  • S&P 500 futures (NO = F): + 10.75 (+ 0.27%) to 3,941.00

  • Dow futures (ÅM = F): +76.00 (+ 0.24%) to 31,819.00

  • Nasdaq futures (NQ = F): +30.50 (+ 0.25%) to 12,000.25

  • Rough (CL = F): + $ 0.02 (+ 0.02%) to $ 105.73

  • Gold (GC = F): – $ 1.90 (-0.10%) to $ 1851.80 per ounce

  • 10-year Treasury (^ TNX): -7.2 bps to give 2.9210%

A trader works on the floor of the New York Stock Exchange NYSE in New York, USA, May 5, 2022. US stocks plunged Thursday as heavy sales intensified on Wall Street.  The Dow Jones Industrial Average fell 1063.09 points, or 3.12 percent, to 32,997.97.  The S&P 500 fell 153.30 points, or 3.56 percent, to 4,146.87.  The Nasdaq Composite Index fell 647.17 points, or 4.99 percent, to 12,317.69.  (Photo by Michael Nagle / Xinhua via Getty Images)

A trader works on the floor of the New York Stock Exchange NYSE in New York, USA, May 5, 2022. US stocks plunged Thursday as heavy sales intensified on Wall Street. The Dow Jones Industrial Average fell 1063.09 points, or 3.12 percent, to 32,997.97. The S&P 500 fell 153.30 points, or 3.56 percent, to 4,146.87. The Nasdaq Composite Index fell 647.17 points, or 4.99 percent, to 12,317.69. (Photo by Michael Nagle / Xinhua via Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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