Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, June 3, 2022.
Brendan McDermid | Reuters
US stock futures fell Sunday night as Wall Street tries to recover from one of the worst weeks of 2022.
Futures related to the Dow Jones Industrial Average fell 176 points, or 0.6%, while S&P 500 futures fell 0.95%. Nasdaq 1[ads1]00 futures retreated 1.5 percent.
The large averages last week posted their biggest weekly declines since the end of January. The Dow and S&P 500 fell 4.6% and 5.1%, respectively, while the Nasdaq Composite lost 5.6%.
Some of these losses came on Friday, when higher-than-expected US inflation data scared investors. The Dow index fell 880 points, or 2.7%. The S&P 500 and Nasdaq lost 2.9% and 3.5%, respectively.
The Bureau of Labor Statistics reported on Friday that the US consumer price index rose by 8.6% last month from a year ago, the fastest increase since December 1981. That gain exceeded economists’ expectations. The so-called core CPI, which removes food and energy prices, also exceeded the estimates of 6%.
On top of that, the preliminary reading recorded in June for the University of Michigan’s consumer sentiment index at a record low of 50.2.
These figures come ahead of a much-anticipated Federal Reserve meeting this week, with the central bank expected to announce a rate hike of at least half a point on Wednesday. The Fed has already raised interest rates twice this year, including a 50 basis point increase (0.5 percentage points) in May in an attempt to stave off the recent rise in inflation.
“The May KPI report showed few signs of rising inflation, although we still expect a peak soon. The report also suggests a more hawkish Fed and higher recession risk,” wrote Ed Yardeni, president of Yardeni Research.
“Investor and consumer sentiment have both deteriorated. But this time around, pervasive bearishness may not be as useful a bullish signal as before,” he said, adding that the firm now sees a 45% chance of a “mild recession”. . ” it is up from the previous forecast of 40%.
Equities have had a tough year as fears of a recession rise along with consumer prices. The S&P 500 is down 18.2% so far this year through the end of Friday. It is also 19.1% below an intraday record set in January. The Dow index has fallen 13.6% in 2022, and the Nasdaq Composite is deep in the bear market, down 27.5% this year and trading 30% below a record high in November.
Subscribe to CNBC PRO for exclusive insight and analysis, and live workday programming from around the world.