Wall St turns a blind eye as inflation data cements rate hike bets

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  • US consumer prices jump 7.9% year-on-year in February
  • Banks and big tech stocks fall after strong rally
  • Amazon jumps after stock split and new buyout plan
  • Futures down: Dow 1.2%, S&P 1.2%, Nasdaq 1.5%

March 10 (Reuters) – Wall Street’s main indexes were expected to open lower on Thursday after data showed consumer prices in February jumped as expected, solidifying the case for a rate hike. interest by the Federal Reserve later this month.

The Labor Department report showed consumer prices in February jumped 7.9% year-on-year, the biggest annual increase in 40 years. Read more

Although the numbers came in as expected, investors feared inflation could pick up further in the coming months as Russia’s war on Ukraine pushes up prices for oil and other commodities.

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“The fear was that it was going to be worse than it looks. The situation with inflation is not going to change anytime soon,” said Jimmy Lee, managing director of Las-based asset manager Wealth Consulting Group. Vegas.

“It’s going to be trickier now in terms of how the Fed has to handle inflation and oil prices are going to impact a lot of consumers.”

All eyes are now on the March 15-16 Fed policy meeting. Fed Chairman Jerome Powell said last week that he would back a quarter-point rate hike when the US central bank meets later this month and that he was “ready to act.” more aggressively” later if inflation does not come down as quickly as expected. Read more

Traders now see a 95% chance of a 25 basis point hike by the Fed at its March meeting. IRPR

Meanwhile, talks between Russia and Ukraine yielded no progress as the war entered its third week on Thursday, sending the CBOE Volatility Index (.VIX) soaring after falling for two days consecutive.

The S&P 500 posted its biggest one-day percentage gain since June 2020 on Wednesday, while the Nasdaq posted its biggest gain since March 2021 on the boost from financials and tech stocks and lower oil prices. .

As of 8:57 a.m. ET, Dow e-minis were down 399 points, or 1.2%, S&P 500 e-minis were down 51 points, or 1.19%, and Nasdaq 100 e-minis were down 204 points, or 1.49%.

Big banks fell, with Morgan Stanley (MS.N) down 1.4% in premarket transactions. The S&P 500 Banks Index (.SPXBK) recorded its best day since January 2021 in the previous session.

Growth stocks Megacap Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O), Meta Platforms (FB.O) and Tesla Inc (TSLA.O) fell more than 1 % each.

Shares of Amazon.com Inc jumped 4.0% after its board approved a 20-for-1 split of the e-commerce giant’s common stock and authorized a $10 billion buyout plan. Read more

Oil service companies Schlumberger (SLB.N) and Halliburton (HAL.N) rose 1.8% and 2.1%, leading gains in energy stocks.

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Reporting by Devik Jain and entrepreneur Sabahatjahan in Bengaluru; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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