Traders work on the floor of the New York Stock Exchange (NYSE) in New York, June 3, 2022.
Brendan McDermid Reuters
U.S. stock futures fell on Sunday night as Wall Street struggles to recover from one of its worst weeks of 2022.
Dow Jones Industrial Average futures fell 176 points, or 0.6 percent, while S&P 500 futures fell 0.95 percent. Nasdaq 100 futures withdrew 1.5%.
The main average values last week marked their biggest weekly declines since the end of January. The Dow and S&P 500 fell 4.6% and 5.1%, respectively, while the Nasdaq Composite lost 5.6%.
Some of those losses came on Friday, when hotter-than-expected US inflation data scared investors. The Dow fell 880 points, or 2.7%. The S&P 500 and Nasdaq lost 2.9% and 3.5%, respectively.
The Bureau of Labor Statistics said Friday that the U.S. consumer price index rose 8.6 percent last month from a year earlier, its fastest rise since December 1981. That increase exceeded economists’ expectations. The so-called core consumer price index, which eliminates food and energy prices, also reached estimates above 6%.
On top of that, the preliminary June readings for the University of Michigan’s consumer sentiment index were at a record low of 50.2.
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These figures come ahead of the long-awaited Federal Reserve meeting this week, with the central bank expected to announce an interest rate hike of at least half a point on Wednesday. The Fed has already raised interest rates twice this year, including an increase of 50 basis points (0.5 percentage points) in May in a bid to prevent a recent spike in inflation.
“The CPI report for May showed scant signs of peak inflation, although we are still expecting a peak soon. The report also suggests a more hawk Fed and a higher risk of recession,” wrote Ed Yardeni, president of Yardeni Research.
“The sentiment of both investors and consumers has deteriorated. But this time, a comprehensive bearish focus may not be as useful as the opposite upward signal as in the past, he said, adding that the company now sees a 45% chance of a “slight recession”. this is more than the previous forecast of 40%.
Equities have had a difficult year as fears of a recession rise with consumer prices. The S&P 500 was down 18.2% year on year by the end of Friday. This is also 19.1% below the record for the day set in January. The Dow fell 13.6% in 2022, and the Nasdaq Composite is deep in the bear market, up 27.5% this year and trading 30% below the record high set in November.
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