After ending yesterday’s choppy session narrowly mixed, stocks are likely to come under pressure in early trading on Wednesday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.0 percent.
The futures plunged following the release of a closely watched Labor Department report showing consumer prices in the U.S. increased by more than expected in the month of January.
The Labor Department said its consumer price index advanced by 0.5 percent in January after climbing by 0.4 percent in December. Economists had expected consumer prices to rise by 0.3 percent.
The report also said the annual rate of consumer price growth accelerated to 3.0 percent in January from 2.9 percent in December, while economists had expected the pace of growth to remain unchanged.
The bigger than expected monthly increase by consumer prices partly reflected a continued surge by energy prices, which shot up by 1.1 percent in January after spiking by 2.4 percent in December.
Excluding the jump by energy prices as well as a 0.4 percent increase by food prices, core consumer prices rose by 0.4 percent in January after inching up by 0.2 percent in December. Core prices were expected to increase by 0.3 percent.
The annual rate of core consumer price growth also ticked up to 3.3 percent in January from 3.2 percent in December. Economists had expected the pace of growth to slow to 3.1 percent.
The hotter than expected inflation data is likely to increase speculation the Federal Reserve will leave interest rates on hold for a prolonged period.
Fed Chair Jerome Powell noted during his congressional testimony on Tuesday that the central bank can “maintain policy restraint for longer” if inflation does not continue to move sustainably toward 2 percent.
Following the rebound seen during Monday’s session, stocks fluctuated over the course of the trading day on Tuesday. The major averages swung back and forth across the unchanged line as the day progressed before eventually closing narrowly mixed.
While the Nasdaq fell 70.41 points or 0.4 percent to 19,643.86, the S&P 500 crept up 2.06 points or less than a tenth of a percent to 6,068.50 and the Dow rose 123.24 points or 0.3 percent to 44,593.65.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index advanced by 0.9 percent and Hong Kong’s Hang Seng Index surged by 2.6 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index is down by 0.5 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.2 percent.
In commodities trading, crude oil futures are sliding $0.83 to $72.49 a barrel after jumping $1 to $73.32 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,895.20, down $37.40 compared to the previous session’s close of $2,932.60. On Tuesday, gold edged down $1.80.
On the currency front, the U.S. dollar is trading at 154.29 yen compared to the 152.49 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0327 compared to yesterday’s $1.0361.
Business News
U.S. Stocks May Come Under Pressure As Consumer Prices Rise More Than Expected
2025-02-12 13:55:38
