U.S. Stocks May Extend Yesterday’s Pullback In Early Trading

Following the pullback seen in the previous session, stocks may see some further downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 84 points.

Concerns about the impact of elevated inflation may weigh on the markets after the Labor Department released a report showing a bigger than expected increase in U.S. consumer prices in the month of October.

The report said the consumer price index jumped by 0.9 percent in October after rising by 0.4 percent in September. Economists had expected consumer prices to climb by 0.6 percent.

Excluding higher prices for food and energy, core consumer prices still increased by 0.6 percent in October after inching up by 0.2 percent in September. Core prices were expected to rise by 0.4 percent.

The Labor Department also said the annual rate of growth in consumer prices accelerated to 6.2 percent in October from 5.4 percent in September, reaching the highest level since November of 1990.

The annual rate of growth in core prices also accelerated to 4.6 percent from 4.0 percent, reflecting the biggest jump in prices since August of 1991.

The acceleration in the rate of consumer price inflation may raise concerns about the outlook for interest rates even though the Federal Reserve has signaled it will not be in a hurry to begin raising rates.

Meanwhile, a separate report released by the Labor Department showed another modest decrease in first-time claims for U.S. unemployment benefits in the week ended November 6th.

The report said initial jobless claims edged down to 267,000, a decrease of 4,000 from the previous week’s revised level of 271,000.

Economists had expected jobless claims to dip to 265,000 from the 269,000 originally reported for the previous week.

Jobless claims decreased for the sixth consecutive week, once again falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.

After trending higher over the past several sessions, stocks gave back some ground during trading on Tuesday. The major averages pulled back off Monday’s record closing highs, although selling pressure remained relatively subdued.

The major averages climbed well off their worst levels of the day but still closed in negative territory. The Dow fell 112.24 points or 0.3 percent to 36,319.98, the Nasdaq slid 95.81 points or 0.6 percent to 15,886.54 and the S&P 500 dropped 16.45 points or 0.4 percent to 4,685.25.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.6 percent, while China’s Shanghai Composite Index fell by 0.4 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index has risen by 0.6 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is down by 0.3 percent.

In commodities trading, crude oil futures are edging down $0.08 to $84.07 a barrel after surging $2.22 to $84.15 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,840.50, up $9.70 compared to the previous session’s close of $1,830.80. On Tuesday, gold crept up $2.80.

On the currency front, the U.S. dollar is trading at 113.42 yen compared to the 112.87 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1548 compared to yesterday’s $1.1593.

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