Stock futures slid as Wall Street awaited a second key inflation report, with Dow Jones Industrial Average futures falling 0.2%, S&P 500 futures losing 0.2%, and Nasdaq-100 futures dropping 0.14%. This decline came after a selloff on Wednesday as investors reacted to a hot March inflation reading that raised concerns about the Federal Reserve potentially implementing fewer rate cuts than expected. Goldman Sachs chief economist Jan Hatzius adjusted his firm’s rate cut call to two from three in 2024, with the first rate reduction now expected in July.
The Dow Jones Industrial Average led losses on Wednesday, tumbling 1.09%, while the S&P 500 dropped 0.95% and the Nasdaq Composite sank 0.84%. Real estate was the hardest-hit sector, posting a decline of more than 4%, while the 10-year Treasury note rate exceeded 4.5% and the 2-year Treasury yields surged close to 5%. The market’s next key inflation tests are expected with Thursday’s release of March’s producer price index, with economists anticipating growth of 0.3% overall and 0.2% excluding food and energy. Additionally, weekly jobless claims data is set to be released before the bell.
Earnings season continues on Thursday with results from CarMax, Fastenal, and Constellation Brands before the bell. The official start to the period kicks off with big bank earnings from JPMorgan, Wells Fargo, and Citigroup on Friday. Investors will be closely watching these reports for insights into the impact of inflation and the Federal Reserve’s potential rate adjustments. Despite the market turbulence and uncertainties surrounding inflation, some analysts remain optimistic about the labor market and believe that inflation will eventually be brought under control.
Overall, the stock market is facing volatility and uncertainty as investors digest the implications of the recent inflation data and await upcoming economic reports and earnings releases. The Fed’s potential response to inflation remains a key concern for market participants, with the timing of rate adjustments dependent on future inflation news. As the market navigates these uncertainties, investors are closely monitoring economic indicators and corporate earnings for signs of how inflation and Fed policy changes may impact various sectors and industries. The coming days will provide further insight into the market’s direction and the implications of inflation for investors and businesses alike.
