Stock index futures fell as Wall Street looked ahead to a second key inflation report.
Futures and Dow Jones Industrial Average fell 90 points, or about 0.2%, while S&P 500 Index Futures It also fell 0.2%. Nasdaq 100 Futures down 0.2%.
Stocks fell into selling mode on Wednesday as investors assessed hot March inflation data, raising concerns that the Federal Reserve may cut interest rates less than expected. Minutes from last month’s Federal Reserve meeting also showed that some officials remain concerned about whether inflation can achieve the central bank’s 2% target.
The surprising report, which showed consumer prices rose 0.4% in March and 3.5% on the year, prompted Goldman Sachs chief economist Jan Hatzius to revise the firm’s forecast for two rate cuts in 2024 from three. He now expects the first rate cut to happen in July.
“I’m optimistic that we’re rebalancing the labor market and that over time we’re going to lower inflation — and to me, none of those things have changed,” he told CNBC’s “Closing Bell” on Wednesday. “What has changed, however, is the timing of the Fed’s adjustment, as it will depend more on sequential inflation news, which is obviously disappointing.”
this Dow Jones Industrial Average led the losses on Wednesday, down 1.09%, while S&P 500 Index down 0.95%.this Nasdaq Index down 0.84%. Ten of the 11 S&P 500 sectors ended in the red, with the real estate sector bearing the brunt of the decline, falling more than 4%. The 10-year Treasury yield rose to 4.5%, while the 2-year Treasury yield surged to nearly 5%.
The market’s next key inflation test will be released on Thursday, March’s producer price index. Economists polled by Dow Jones expect wholesale prices to rise 0.3% in March, or 0.2% if food and energy are excluded. In addition, the weekly number of initial jobless claims will also be released before the market opens.
The early stages of earnings season continue Thursday with results from Chemax, fastener and Constellation brand before the bell rings. The period unofficially begins with Friday’s big bank earnings reports from JPMorgan Chase, Wells Fargo and Citigroup.
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