Stock Futures Steady Before US Producer Price Data: Markets Wrap
(Bloomberg) -- US stock futures erased earlier sharp losses as investors waited to see if wholesale inflation data due later would confirm signs that price growth is slowing.
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S&P 500 and Nasdaq 100 contracts fell less than 0.1%, after gains on Wednesday spurred by a softer-than-expected inflation print. While weak earnings hit software firm Adobe Inc. and clothing retailer American Eagle Inc. in premarket trading, Intel Inc. jumped as much as 11% after the chipmaker named a new chief executive officer.
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European equities rose about 0.5%, continuing their year-to-date outperformance over US peers. Gold was the other 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.
The previous day’s CPI reading “has reinvigorated belief in the declining inflation narrative,” said Daniel Murray, CEO of EFG Asset Management in Zurich.
Investors are now awaiting readings on US wholesale inflation and initial jobless claims, with price growth seen moderating to 0.3% last month.
Recent weeks have seen a slew of Wall Street banks including Goldman Sachs Group Inc. and Citigroup Inc. cut their forecasts for the S&P 500, predicting a hit from the slowing economy. Yardeni Research added to that bearish chorus, noting that Trump’s tariff policies have heightened the risk of stagflation.
Still, some strategists think a bottom for US stocks is “probably” here, with JPMorgan Chase & Co. saying the worst of the correction may be over, with credit markets indicating a lower risk of a recession.
Meanwhile Treasury yields shrugged off the cooler inflation data to edge higher, with investors focusing on the effect higher tariffs could have on prices in the coming months. The Federal Reserve, which meets next week, has already signaled it will take a wait-and-see approach before cutting interest rates further.
In commodities, crude oil futures slipped as the International Energy Agency warned global demand is under pressure from the escalating trade war.
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