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US futures swung as inflation jumped more than expected

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U.S. stock futures hovered around the flat line Thursday morning, as December's inflation reading came in slightly hotter than economists had expected, raising new questions about the Federal Reserve's path on interest rates.

S&P 500 futures (^GSPC) fell about 0.1% after the benchmark index ended Wednesday at its highest close since January 2022, just short of setting a new record. Dow Jones Industrial Average (^DJI) futures fluctuated around the flat line, while tech-heavy Nasdaq 100 (^NDX) futures also fell about 0.1%.

Stocks struggled this week as investors counted down to the US consumer inflation reading for December. This reading showed a slightly larger jump than expected, as prices rose by 0.3% on a monthly basis and 3.4% on an annual basis. On a “core” basis, inflation rose by 3.9% over the past year.

This reading was considered crucial for traders who have been increasingly calculating the odds of a “soft landing” – where inflation falls to 2% without an economic contraction – since the last CPI report.

Meanwhile, cryptocurrency stocks got a boost after the Securities and Exchange Commission granted regulatory approval for bitcoin ETFs in the US to begin trading on Thursday, which is seen as a game-changer for the sector. Shares in exchange Coinbase (COIN) and mining company Marathon Digital (MARA) were among those that rose in pre-market trading.

Bitcoin (BTC-USD) rose above $47,000 to trade at its highest levels since March 2022, while rival ethereum (ETH-USD) jumped amid bets that the second-largest token is next to get the ETF's green light.

Ahead of its quarterly financial update on Friday, Citigroup (C) said it would take more than $3 billion in reserves and one-time expenses into the results. Q4 earnings season is crucial for stocks, given their poor performance so far this year.

See also  Technology leads stocks lower amid mixed earnings and concerns about interest rate cuts

He lives1 update

  • Inflation rates are higher than expected in December

    Thursday's inflation report showed that consumer prices rose slightly more than expected in November.

    A quick look at the numbers:

    • Core CPI, month-on-month: 0.3% increase vs. 0.2% expected

    • Core Consumer Price Index, YoY: 3.4% vs. 3.2% expected

    • “Core” CPI on an annual basis: 3.9% vs. 3.8% expected

    Yahoo Finance's Josh Schaeffer has all the details here.

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