US stock futures struggled for direction on Friday morning as investors adopted the inflation update, which showed that price rises unexpectedly rose by the most since 1981 amid rising gas, food and more prices. goods and services.
Contracts for the S&P 500, Dow and Nasdaq plummeted after printing. Government bond yields jumped to the short end of the curve, while 2-year yields jumped to 2.9%. The 10-year reference yield on government bonds withdrew to just over 3%. Crude oil prices in the United States jumped above $ 122 a barrel, staying close to the highest level since March.
For market participants, the publication of the Consumer Price Index (CPI) of the Bureau of Labor Statistics was a key imprint, offering a new perspective on the extent to which price increases persist in the US economy. The index accelerated unexpectedly to report annual growth of 8.6% in May, after rising 8.3% in April. This marks the biggest jump since the end of 1981 and pulled out the previous 41-year high set in the March consumer price index, which rose 8.5%.
On a monthly basis, the CPI also jumped 1.0%, or more than the expected increase of 0.7%, and an increase of 0.3% in April. Core inflation, which excludes volatile food and energy prices, rose 6.0% year on year after rising 6.2% in April.
Inflation remains a dominant problem for investors, politicians and the American public this year. Higher prices have threatened to weigh on consumer spending – the main driver of US economic activity – as goods and services become increasingly inaccessible. And inflation has already shown signs of triggering a rotation of spending on some discretionary goods to other areas of purchase.
And for investors, inflation has also become a key factor in the progress of Federal Reserve monetary policy. As the Fed aims to help reduce rising prices, the central bank is expected to raise interest rates by another half a point at next week’s policy meeting, which further increases the cost of borrowing and doing business for companies.
The story continues
Amid these concerns about the impact of inflation on the economy and the Fed’s next steps, stocks continue to be fragmented. Each of the three main averages was on track to post a consecutive week of losses, based on Thursday’s closing prices. The S&P 500 aimed for a weekly decline of about 2%.
“At the end of the day, the markets are just facing a lot of uncertainty right now. And it’s not just this inflation story, “Jack Manley, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live on Thursday. “We still have some uncertainty, some uncertainty about what the Fed will do. The war in Europe continues to rage. And we know that new events are happening on this front every few days.”
“It simply came to our notice then. And without any real clarity on these things, it is difficult for markets to move meaningfully up or down, “he added. “At the end of the day, that’s all the markets really want is news. And no news is bad news.”
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7:14 a.m. ET: Stock futures are mixed ahead of inflation data
Here are the main market movements at 7:14 AM ET:
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S&P 500 futures (ES = F): -6.25 points (-0.16%) to 4010.00
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Dow futures (YM = F): -85 points (-0.26%) to 32,178.00
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Nasdaq futures (NQ = F): +6.25 points (+ 0.05%) to 12,281.25
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Crude oil (CL = F): + $ 0.94 (+ 0.77%) to $ 122.45 per barrel
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Gold (GC = F): – $ 8.20 (-0.44%) to $ 1844.60 per ounce
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10-year treasury (^ TNX): -0.7 bps to 3.035% yield
NEW YORK, NEW YORK – JUNE 03: Traders work on the floor of the New York Stock Exchange (NYSE) at the beginning of the trading day on June 3, 2022 in New York. A new job report released by the Ministry of Labor this morning shows that employers added 390,000 jobs in May. Shares fell before the start of the start on Friday, returning the indices back to red for the week. (Photo by Spencer Platt / Getty Images)
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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