Wednesday September 14th


Stock futures are little changed after major averages suffer worst day since June 2020

U.S. stock markets index futures were mostly flat on Wednesday after another hot inflation reading sent the major averages tumbling to their worst day since June 2020 and dampened investors’ expectations of a less hawkish Federal Reserve. Futures tied to the Dow Industrial Average were last up 33 points, or 0.1%. S&P 500 futures ticked up 0.2%, and Nasdaq 100 futures added about 0.3%. The Dow sank more than 1,200 points Tuesday, or nearly 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite dropped 5.2%. The market moves came after August’s consumer price index report showed headline inflation rose 0.1% on a monthly basis despite a drop in gas prices. The hot inflation report left questions over whether stocks could go back to their June lows or fall even further. It also spurred some fears that the Federal Reserve could potentially hike even higher than the 75 basis points markets are pricing in. “It caught the market off guard,” said LPL Financial’s Quincy Krosby. “The market had been expecting at least that we had leveled off — perhaps not moving downward but certainly not climbing higher. It was the wrong direction and the concern, of course, is always translated into what does this mean for the Fed.” All 30 Dow stocks and S&P 500 sectors finished the session lower, led to the downside by communications services. The sector fell 5.6% and finished its worst day since February, dragged down by shares of big technology names like Netflix and Meta Platforms, which tumbled about 7.8% and 9.4%, respectively. Shares in the Asia-Pacific dropped sharply on Wednesday after indexes on Wall Street plunged following a higher-than-expected U.S. consumer price index report for August. Japan’s Nikkei 225 dropped 2.78% to 27,818.62, and the Topix index fell 1.97% to 1,947.46. The Hang Seng index in Hong Kong dipped 2.33% in the final hour of trade, and the Hang Seng Tech index fell 2.68%. In Australia, the S&P/ASX 200 shed 2.58% to 6,828.60. The Kospi in South Korea lost 1.56% to 2,411.42 – the won passed the 1,390-mark against the greenback, the weakest levels since March 2009. Mainland China’s Shanghai Composite lost 0.8% to 3,237.54 and the Shenzhen Component fell 1.247% to 11,774.78. Oil prices stabilized on Wednesday, after dropping by more than $1 earlier in the session, following signs of bullish demand in an International Energy Agency (IEA) report. Brent crude futures added 1 cent to trade at $93.20 a barrel. U.S. West Texas Intermediate crude was up 4 cents at $87.35. Gold edged up on Wednesday as the dollar pulled back, but gains were capped by bets for more aggressive Federal Reserve rate hikes fueled by a surprise rise in U.S. inflation. Spot gold rose 0.2% to $1,704.13 per ounce by 0936 GMT. U.S. gold futures eased 0.1% to $1,715.10.