A previous version of this report misquoted the yield on the two-year Treasury note. The story has been corrected.
Wall Street The New York Stock Exchange is seen during afternoon trading on Sep. 13, 2022 in New York City.
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U.S. stock futures indicated a bounce for Wall Street on Wednesday, off the worst losses in two years as investors reeled from disappointing inflation data. Markets will get another data update with producer price inflation due ahead of the open.
How are stock-index futures trading?
-
S&P 500 futures
ES00,
+0.47%
rose 25.75 points, or 0.6%, to 3,976.75 -
Dow Jones Industrial Average futures
YM00,
+0.35%
rose 164 points, or 0.5%, to 31,376 -
Nasdaq-100 futures
NQ00,
+0.52%
gained 87 points, or 0.7%, to 12,200
In a dramatic session on Tuesday, major indexes logged the biggest daily percentage falls since June 11, 2020. The Dow Jones Industrial Average
DJIA,
tumbled 1,276.37 points, or 3.9%, to 31,104.97, the S&P 500
SPX,
fell 177.72 points, or 4.3%, to 3,932.69 and the Nasdaq Composite
COMP,
slumped 632.84 points, or 5.2%, to close at 11,633.57.
What’s driving the markets?
Investors were seeking some equilibrium ahead of August producer prices — due at 8:30 a.m. Eastern — that are expected to show a drop of 0.1% from last month’s decline of 0.5%.
In a blow to investors who had been hoping for an ease in hot inflation, Tuesday’s data showed CPI rising 0.1% in August and the annual rate slowing to 8.3% — against expectations for a monthly fall of 0.1% and a year-over-year rate of 8%. The core inflation rate also climbed by more than expected.
Investors dumped stocks on worries sticky inflation could force the Federal Reserve to keep its aggressive tightening of monetary policy for longer. Some have predicted the Federal Reserve could next week raise interest rates by as much as 1%.
“U.S. inflation is not coming down in a hurry and, despite some encouraging signs elsewhere, it has given hawkish price action in rates globally another lease of life,” said an ING team led by Antoine Bouvet, senior rates strategist.
“This means flatter curves, and higher yields. 10Y Treasurys are now within touching distance of their 3.47% June peak and we do not see much that would stop it from beating that level,” said Bouvet.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
was up 2 basis points at 3.441%, while that of the 2-year note
TMUBMUSD02Y,
was up 2 basis points to 3.779%
Tuesday’s Wall Street selloff spread to Asia, where the Nikkei 225 index
NIK,
led losses with a 2.7% drop. The yen
USDJPY,
bounced off a low of ¥144.94 after the Nikkei newspaper said the Bank of Japan had conducted a “check” on rates that some see as a precursor to intervention. European stocks
SXXP,
were modestly lower.