Live stock market news updates: Stock futures fall as indices head for weekly losses
U.S. stock futures opened lower on Thursday night, with major indexes heading for weekly losses as concerns about lingering inflation and the resilience of the U.S. economy heightened volatility.
Contracts on the S&P 500 fell late in the session. Previously, the index closed within striking distance of a bear market, generally defined as a close of at least 20% from a recent high. The index is down just over 18% since its record close on Jan. 3 and headed for a weekly decline of 4.7% if losses continue through the end of Friday’s session.
The Dow Jones Industrial Average and Nasdaq Composite also each headed for weekly losses of 3.6% and 6.4%, respectively. Treasury yields soared, then pared their gains this week, with the benchmark 10-year Treasury yield ending Thursday below 2.9%. Bitcoin prices briefly dipped below $27,000 on Thursday to the lowest level since December 2020, as a Luna price crater further rippled through the broader cryptocurrency market.
Market swings this week coincided with two major inflation reports that were hotter than expected. Thursday’s Producer Price Index showed an 11% year-on-year increase in wholesale prices last month, easing only slightly from the record high of 11.5 % Of March. And the Consumer Price Index released earlier this week showed a still high 8.3% annual increase in prices paid by consumers last month.
“Inflation has certainly become not just a topical issue, but a real issue for the broader market, as the Fed has also raised its forecast for the number of [interest rate] hikes needed,” Sonali Pier, managing director and portfolio manager at Pimco, told Yahoo Finance Live on Thursday. rates, unfolds part of the balance sheet, can take away some of that inflation foam. Because it’s quite high, and it’s starting to have an impact on businesses – from the point of view of their ability to get things done from a pricing power point of view, as well as consumers, that either at the gas pump or as a result of food increases, etc.
Other strategists agreed that the Fed’s response to inflation — and the resilience of the economy as the Fed tightens financial conditions to fight inflation — will be the key factor for markets to watch.
“We’re in a high inflation environment right now. The labor market is very tight. The Fed wants to bring inflation down. They kind of want to cool the overheated labor market, which means their party taken is to tighten conditions and try to slow growth,” Jason Draho, head of asset allocation at UBS, said Thursday. “In this environment, it’s not good for any type of financial asset.”
“[Once] we’re getting kind of a real break on inflation that people are getting a lot more comfortable with it moderating, and moderating [to] a sustainable level that the Fed might be more comfortable with, and they don’t have to increase more aggressively…I think that’s the key catalyst,” Draho said. “Unfortunately, it could take a few more months before the data starts to clearly show that inflation is well below its peak, and the Fed could hit its target in two years.”
“So I think right now it’s definitely a choppy market,” he added.
6:10 p.m. ET Thursday: Stocks open lower
Here’s where the markets were trading on Thursday night:
S&P 500 Futures Contracts (ES=F): -10 points (-0.25%) to 3,917.25
Dow futures (JM=F): -73 points (-0.23%) to 31,579.00
Nasdaq futures contracts (NQ=F): -41 points (-0.34%) to 11,906.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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