Stock futures drop as investors continue to study April’s inflation report

US stock futures declined in pre-market trading on Thursday after another day of declines in markets as investors digested inflation data that showed price levels remained elevated in April.

Futures linked to the S&P 500 index fell 0.6% after the index settled at 3,935.18, its lowest level since March 2021. The S&P 500 index fell more than 17% in the first 90 trading days of 2022, marking its second worst start to the year according to data Compound Capital Advisors. Contracts on the Dow Jones Industrial Average are down 0.5% after dropping 300 points, or just over 1% in the previous session, and Nasdaq futures are down nearly 1%.

The moves were based on a series of sharp losses in stock markets and tracking the April Consumer Price Index (CPI) released on Wednesday, which showed an inflation rate that held near a 40-year high despite a marginal decline from the previous month. Moreover, the so-called core price index, which does not include volatile food and energy categories, came in higher than economists had expected, sparking fears among investors that high prices may persist.

The April snapshot of inflation across the US comes as investors gauge the strength of the Federal Reserve’s intervention to rein in high price levels through monetary tightening, including interest rate increases. Uncertainty about the central bank’s next move sent turmoil across risky assets, sending the three major indices to year-to-date trading lows.

“Inflation appears to be entrenched in many areas of the economy, and regardless of whether we experience peak inflation, a continued slow decline will be more problematic for the Federal Reserve to cool inflation at the same time without pushing the economy into recession,” said Charlie Ripley, a The senior investment strategist at Allianz Investment Management, said in an email note on Wednesday.

Cleveland Federal Reserve Chairman Loretta Mester He told Yahoo Finance on Tuesday that a 50 basis point rate hike was likely at the Fed’s next two policy-setting meetings, with a 75 basis point increase left on the table as the central bank ramps up efforts to mitigate inflation.

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“It’s going to be a challenge no doubt, because there are things that happen on the supply side and the demand side,” Meester said. “But inflation risks remain elevated and more dangerously high as we continue due to inflation expectations, so it’s really important that we commit to doing what we need to do.”

If inflation levels come out in the second half of the year, Peter Easley, head of portfolio management at the Commonwealth Financial Network, said there would be less pressure on the Fed to combat high price levels with aggressive monetary policies, “leaving open the possibility of a soft landing for the economy.” In exchange for crashing and burning those markets that were recently pricing them.”

“The second half of the year could be a strong period for stocks and bonds if inflation continues to moderate and the scale of interest rate hikes falls short of expectations,” Eisley said in a note. “Currently, investors are pricing in a doomsday scenario with inflation and missing the forest for the trees.”

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6:30 a.m. ET: Instacart files for grocery delivery platform IPO

Instacart Inc. , the largest online grocery delivery service in the United States, has Confidentially filed documents for initial public offeringaccording to a Bloomberg News report.

The company is said to be working with banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. On the fly, according to Bloomberg, citing people familiar with the matter, who indicated that the listing could happen as soon as this year, although the timing could change.

Instacart, which has grown sharply during the pandemic as people switch to buying groceries online, recently saw a slowdown in growth after the COVID boom as consumers returned to in-person supermarket visits.

The company revealed in March that it had lowered its valuation by about 40% to $24 billion. Bloomberg reports that Instacart was previously valued at $39 billion in a March 2021 funding round from companies including Andreessen Horowitz, Sequoia Capital and D1 Capital Partners, as well as Fidelity Management & Research Co. and T. Rowe Price Associates Inc.

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6:14pm ET Wednesday: Stock futures rise after losses in stocks continue

Here is where stock futures were in extended trading prior to Wednesday’s session:

• S&P 500 futures contracts (ES = F.): +10.75 (+0.27%) to 3941.00

• Dow futures contractsYM = F.): +76.00 (+0.24%) to 31819.00

• Nasdaq futures contractsNQ = F.): +30.50 (+0.25%) to 12000.25

• raw (CL = F.): + $0.02 (+0.02%) to $105.73

• He went (GC = F.):- $1.90 (-0.10%) to $1851.80 per ounce

• Treasury for 10 years (^ degeneration): -7.2 basis points to produce 2.9210%

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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