US stock futures dropped as investors waited to see if wholesale inflation data due later would confirm signs of a slowdown in price growth, while President Donald Trump issued a fresh threat of trade tariffs against Europe.
S&P 500 contracts retreated 0.5% while those on the Nasdaq 100 were down 0.7% after gains on Wednesday spurred by a softer-than-expected consumer inflation print. A slew of weak earnings from the likes of software firms Adobe Inc. and SentinelOne Inc. hit their shares in premarket trading, though Intel Inc. jumped as much as 11% after the chipmaker named a new chief executive officer.
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Gold was a notable mover, with prices rising toward record highs as several banks predicted further gains for the haven asset amid the escalation in global trade tensions.
Investors are now awaiting readings on wholesale inflation and initial jobless claims. While price growth is seen moderating to 0.3% last month, the data will not take into account fresh tariffs that have raised fears of an economic slowdown. Those risks were highlighted by Trump’s threat on Thursday to retaliate if the European Union did not immediately remove levies imposed in response to US tariff hikes.
Daniel Murray, CEO of EFG Asset Management in Zurich, said while the previous day’s CPI reading “has reinvigorated belief in the declining inflation narrative,” markets are unable to shake off their broader concerns over the damage from President Donald Trump’s tariff policies.
“If there was a reasonable degree of certainty regarding what is going to be implemented, when and how other countries will respond, then markets could price the likely outcomes more easily and move on,” EFG’s Murray said. “However, that clarity is sadly missing at the moment.”
All that has driven a slew of Wall Street banks, including Goldman Sachs Group Inc. and Citigroup Inc., to cut their forecasts for the S&P 500. Yardeni Research added to that bearish chorus, noting that Trump’s tariff policies have heightened the risk of stagflation.
Still, some strategists reckon a bottom for US stocks is “probably” here, with JPMorgan Chase & Co. saying the worst of the correction may be over.
European shares slipped 0.2%, extending their drop after Trump’s comment.
Meanwhile Treasury yields edged higher as the Federal Reserve, which meets next week, has already signaled it will take a wait-and-see approach before cutting interest rates further. Bund yields also rose ahead of a special session in Germany’s parliament to debate the legislation needed for sweeping fiscal reforms.
In commodities, crude oil futures slipped as the International Energy Agency warned global demand is under pressure from the escalating trade war. Gold rose 0.4% to about $2,947 an ounce.
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Key events this week:
US PPI, initial jobless claims, Thursday
US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.5% as of 8:14 a.m. New York time
Nasdaq 100 futures fell 0.7%
Futures on the Dow Jones Industrial Average fell 0.3%
The Stoxx Europe 600 fell 0.2%
The MSCI World Index fell 0.1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.3% to $1.0856
The British pound fell 0.2% to $1.2941
The Japanese yen rose 0.3% to 147.86 per dollar
Cryptocurrencies
Bitcoin fell 0.3% to $82,822.35
Ether was little changed at $1,893.23
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.32%
Germany’s 10-year yield advanced one basis point to 2.89%
Britain’s 10-year yield advanced two basis points to 4.74%
Commodities
West Texas Intermediate crude fell 0.7% to $67.23 a barrel
Spot gold rose 0.4% to $2,946.07 an ounce
source: finance.yahoo.com
