U.S. stocks lost momentum on Wednesday as investors weighed up big-than-expected inflation data and looked to Federal Reserve minutes for insight into policymakers’ thinking on interest rates.
The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) were both roughly flat, recapturing even more solid gains from earlier in the session. The tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.4%, poised to build on Tuesday’s victory.
U.S. wholesale prices rose at the fastest pace since April last month, with the producer price index in September rising 2.2% compared to the same month last year, compared with an expected 1.6% rise.
PPI readings suggest that inflationary pressures remain despite the Fed’s aggressive rate hikes. Minutes of the central bank’s last meeting, scheduled for later on Wednesday, should provide further insight into the future direction of policy.
Read more: What the Fed’s rate hike pause means for bank accounts, CDs, loans, and credit cards
Meanwhile, U.S. Treasury yields continued to fall from 16-year highs hit during the bond selloff as Israel stepped up shelling of Gaza. The benchmark 10-year Treasury yield (^TNX) fell to around 4.61% on Wednesday, from last week’s high of over 4.88%.
But some analysts said the bond market may not be out of the woods yet, given weak economic data and no solid reason for yields to continue falling.
The recent rise in bond yields is seen as an effective means of central bank tightening, and investors currently expect the US Federal Reserve (Fed) not to raise interest rates at its November meeting. is increasing.
Some Wall Street observers have suggested the Fed may be forced to act after Friday’s stronger-than-expected U.S. consumer inflation.
Oil prices continued to fall as the supply impact from the Middle East conflict appears to be under control, potentially easing some pressure. Crude oil futures (CL=F) fell 2.8% to below $84, and Brent crude oil futures (BZ=F) fell 2.3% to below $86.
Among individual stocks, Exxon Mobil (XOM) shares rose after the energy giant agreed to buy shale rival Pioneer Natural Resources (PXD) in an all-stock deal worth about $60 billion. It fell 4%. Pioneer stock rose less than 1%.
Birkenstock (BIRK) is also in the spotlight, with plans to make its trading debut on the New York Stock Exchange on Wednesday after pricing its IPO at $46 per share. This values the German sandal maker at $8.64 billion.
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aProducer prices gradually rise due to energy and food costs
The final demand producer price index (PPI) rose more than expected in September, rising by a seasonally adjusted 0.5%, according to data released by the government. Bureau of Labor Statistics Wednesday morning. Economists polled by Bloomberg had expected a 0.3% rise.
According to the report, the increase was 0.5%, following a 0.7% rise in August and a 0.6% rise in July. This indicator increased by 2.2% year-on-year, significantly higher than the expected 1.6%.
The rise comes amid rising energy and food costs, with oil prices hitting their highest level in more than a year last month. Excluding these components, PPI rose 0.3% in September, slightly above expectations of 0.2%.
Reacting to the report, Matthew Martin, an economist at Oxford Economist, said: “We expect the Fed to try to ride out the volatility in energy markets, but it’s no less encouraging that momentum in core services is recovering. It’s not a thing,” he wrote. “While authorities are working to contain inflation, we expect prices to slow enough in the coming quarters to avoid further rate hikes,” he said.
Martin noted that this week’s easing in oil prices would be “encouraging news” for the October report.
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a
Stock prices start slightly higher
The stock market started marginally higher on Wednesday, with the tech-heavy Nasdaq Composite Index (^IXIC) leading the morning gains, rising about 0.5%.
The benchmark S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) each rose about 0.4%, while the 10-year Treasury yield (^TNX) fell 6 basis points to trade around 4.59%.
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Stellantis, Walgreens, Exxon: Trending stocks in pre-market trading
Below are some of the stocks leading Yahoo Finance’s trending ticker page in Wednesday’s pre-market trading.
Stellantis (STLA): Shares rose more than 2% premarket. Stellantis and Samsung SDI announced Wednesday that they will build a second electric vehicle battery factory in Kokomo, Indiana.
Walgreens (WBA): Walgreens shares rose nearly 2% Wednesday after the U.S. pharmacy chain named Tim Wentworth as chief executive officer.
Exxon Mobil Corporation (XOM): The stock price fell 2%. The group said Wednesday it had agreed to buy U.S. rival Pioneer Natural Resources in an all-stock deal worth $59.5 billion.
LVMH (MC.PA): LVMH shares fell 5% after the company announced slower sales growth in the third quarter.
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KStock futures rise as Fed interest rate path becomes focus
Stocks were shaping up to move higher on Wednesday as Treasury yields fell ahead of the Fed’s release of minutes from its last meeting.
Dow Jones Industrial Average (^DJI) futures rose 0.24% (85 points) and S&P 500 (^GSPC) futures rose 0.25%. The tech-heavy Nasdaq 100 (^NDX) contract rose 0.33%.
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