Stock futures fell Wednesday night as traders looked to the earnings of major US banks.
Dow Jones Industrial Average futures were down 123 points, or 0.40%. S&P 500 and Nasdaq 100 futures were down 0.47% and 0.52%, respectively.
Stocks fell during Wednesday’s session after inflation data for June came in hotter than expected, reaching its highest level since 1981 and raising concerns that the Federal Reserve will have to raise interest rates more aggressively in the coming months to cut rate increases.
The CPI rose 9.1% year-on-year in June, higher than economists’ estimates for an 8.8% year-over-year increase. Core CPI, which does not include volatile food and energy prices, was 5.9%, also ahead of estimates of 5.7%.
In addition, the The Beige Book, released on Wednesday by the Fed He raised fears of an upcoming recession amid rising inflation.
The CPI report also affected Treasuries, with the two-year Treasury yield rising by nine basis points to around 3.138% while the 10-year Treasury yield fell by nearly 4 basis points to 2.919. The reflection of the two is a A common sign of stagnation.
If the Fed says, “Everything is on the table, you suddenly have to start pricing in a recession,” said Dan Nathan, director of RiskReversal Advisors, during CNBC’s “Fast Money.”
Earnings season continues on Thursday with JPMorgan Chase and Morgan Stanley due to report before the bell on Thursday.
The weekly jobless claims and the Producer Price Index report for June, which measures the prices paid to producers of goods and services, will also be released on Thursday. Both reports will give insight into the economy.
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