US stock futures fell in pre-market trading on Thursday after another day of downturns as investors absorbed more hot inflation data, which showed that price levels remained higher in April.
S&P 500 futures fell 0.4% after the index hit 3935.18, or its lowest level since March 2021. The S&P 500 fell more than 17% in the first 90 trading days of 2022, marking its second worst start to the year, according to Compound Capital Advisors. Contracts for the Dow Jones Industrial Average fell 0.3% after falling 300 points, or just over 1% in the previous session, and Nasdaq futures fell 0.8%.
The moves are based on a series of sharp losses in the stock markets and followed Wednesday’s April consumer price index (CPI), which showed inflation that remained near a 40-year high despite a slight retreat from the previous month. In addition, the so-called basic price index, which excludes volatile food and energy categories, turned out to be higher than economists had expected, raising concerns among investors that higher prices could continue.
The April picture of US inflation comes as investors assess how aggressively the Federal Reserve will intervene to control rising price levels through monetary tightening, including rising interest rates. Uncertainty over the central bank’s next move has caused turmoil in risky assets, sending all three major indices to their lowest trading levels in a year.
“Inflation seems to be fixed in many areas of the economy, and whether or not we have witnessed a peak in inflation, a steady slow decline will be more problematic for the Fed to cool inflation while driving the economy into recession,” said Charlie Ripley. investment strategist at Allianz Investment Management, said in a note sent by email on Wednesday.
Cleveland Fed Chairman Loretta Mester told Yahoo Finance on Tuesday that interest rates are likely to rise by 50 basis points in the next two Federal Reserve policy-making meetings, while leaving an increase of 75 basis points on the table as the central bank increases its inflation – mitigation efforts.
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“It will undoubtedly be a challenge because there are things that are happening on both the supply and demand sides,” said Mester. “But the risks of inflation remaining high become even more risky as we move forward due to inflation expectations, so it’s really important to commit to doing what we need to do.”
Peter Essel, head of portfolio management at the Commonwealth Financial Network, said that if inflation fell in the second half of the year, there would be less pressure on the Fed to fight rising price levels with aggressive monetary policies, “which leaves open the possibility of a soft landing in the economy as opposed to the collapse and burnout that markets have been pricing lately. “
“The second half of the year could be a strong period for stocks and bonds if inflation continues to slow and the scale of interest rates rises below expectations,” Essel said in a note. “Currently, investors are pricing in a doomsday scenario with inflation and they lack the forest for the trees.”
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7:15 a.m. ET: Futures fall as sales continue amid inflation, interest rate worries
Here are the main movements in early futures trading on the Thursday before the market opened:
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S&P 500 futures (ES = F): -16.00 (-0.41%) to 3,914.25
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Dow futures (YM = F): -90.00 (-0.28%) to 31,653.00
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Nasdaq futures (NQ = F): -90.25 (-0.75%) to 11,879.50
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Crude (CL = F): $ -1.35 (-1.28%) to $ 104.36
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Gold (GC = F): – $ 6.80 (-0.37%) to $ 1846.90 per ounce
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10-year treasury (^ TNX): 0.00 bps for 2.9210% yield
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6:30 a.m. ET: Grocery delivery platform Instacart files for IPO
Instacart Inc., the largest online food delivery service in the United States, has submitted confidential documents for initial public offering, according to a report by Bloomberg News.
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 issue who said the listing could happen as early as this year, although the weather may change.
Instacart, which rose sharply during the pandemic when people turned to online grocery shopping, reported a recent slowdown after the COVID boom as consumers returned to personal visits to the supermarket.
The company revealed in March that it was reducing its valuation by about 40% to $ 24 billion. Previously, Instacart was valued at $ 39 billion in funding in March 2021 by companies including Andreessen Horowitz, Sequoia Capital and D1 Capital Partners, as well as Fidelity Management & Research Co. and T. Rowe Price Associates Inc, Bloomberg reported.
A smartphone with the Instacart logo shown can be seen in this illustration, made on March 25, 2022. REUTERS / Dado Ruvic / Illustration
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18:14 ET Wednesday: Futures on stocks rise after long losses in stocks
Here’s where stock futures were in extended trading ahead of Wednesday’s overnight session:
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S&P 500 futures (ES = F): +10.75 (+ 0.27%) to 3941.00
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Dow futures (YM = F): +76.00 (+ 0.24%) to 31,819.00
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Nasdaq futures (NQ = F): +30.50 (+ 0.25%) to 12,000.25
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Crude crude (CL = F): + $ 0.02 (+ 0.02%) to $ 105.73
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Gold (GC = F): – $ 1.90 (-0.10%) to $ 1851.80 per ounce
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10-year treasury (^ TNX): -7.2 bps for 2.9210% yield
A trader works on the floor of the New York Stock Exchange NYSE in New York, United States, May 5, 2022. US stocks fell on Thursday as heavy sales rose on Wall Street. The Dow Jones Industrial Average fell 1,063.09 points, or 3.12 percent, to 32,997.97 points. 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)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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