Contracts on all three major indices held steady ahead of Wednesday’s night session after a turbulent day on Wall Street which saw stocks rise modestly to close in positive territory.
Investors got a searing new impression on inflation in past transactions that showed another high rate of price increase for decades, a day after Federal Reserve Chairman Jerome Powell said in his Appointment testimony that the central bank would intervene if necessary to mitigate the rise in prices.
A new reading of the December Consumer Price Index (CPI) from the Bureau of Labor Statistics showed that the cost of goods had increased at a rate of 7.0% year-on-year at the end of 2022 to mark the highest levels in four decades.
“I think the 7% print has been incorporated a lot into the equity markets,” John Lynch, chief investment officer of Comerica Wealth Management, told Yahoo Finance Live, while adding that we have “a little more to do” on the CPI before it peaks.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, shared a similar view that the rate of price increase could slow from the middle of this year, but the CPI could reach 7.2% in January and February. before subsiding.
“The string of strong increases is over and it will start to decline in March,” he wrote in a note, anticipating that September could see an impression of 4.5%.
Markets will turn their attention to employment data on Thursday, with the Labor Department due to release its latest figures on weekly jobless claims before the market opens. Consensus forecasts by economists indicate that new unemployment insurance claims will increase slightly from the previous week, but gold will be near pre-pandemic lows.
“Persistent high inflation rates along with recent strong labor market data reinforce the hawkish rhetoric provided by the Fed,” Christian Scherrmann, US economist with DWS Group, said in an email. “Going forward, Omicron looks set to dictate the fate of the economy in January and possibly February, but current indications of the new variant unfolding suggest the Fed will stay on track to reduce policy. accommodative monetary policy, most likely early on as in March of this year, raising rates for the first time since December 2018. “
To close the week, banks are expected to release their fourth quarter results on Friday at the start of the earnings season. Sector-based trading fund S&P 500 Financials XLF again set a new intraday high on Wednesday, marking its fourth record in the eight trading days so far in 2022 as investors prepare for the quarterly reports of BlackRock (BLK), Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC).
6:01 p.m. ET Wednesday: Stock futures rise slightly
Here’s where the markets were trading on Wednesday night:
S&P 500 Futures Contracts (ES = F): +2.25 points (+ 0.05%), at 4,718.50
Dow Futures (YM = F): +23.00 points (+ 0.06%), at 36,183.00
Nasdaq Futures (NQ = F): +7.25 points (+ 0.05%) to 15,894.50
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on twitter @alexandraandnyc
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