US futures decline as inflation fears are fueled by rising oil prices –

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U.S. stock index futures dropped more than 1% on Wednesday as rising oil prices fuelled worries about increased prices and an earlier-than-anticipated Federal Reserve monetary stimulus reduction.

Shares of mega-cap growth companies including Apple Inc, Facebook, Amazon.com Inc, and Alphabet Inc, which staged a strong recovery on Tuesday, sank nearly 1.5% each in premarket trade as the benchmark U.S. 10-year yield touched its highest level since June.

Lenders like Bank of America Corp, JPMorgan Chase and Co, and Morgan Stanley all saw their share prices drop by more than 1%, putting pressure on market segments that are sensitive to the state of the economy.

Boeing Co., an airline, and the industrial giants CaterpillarInc. and 3M Co. all had declines of 0.8% to 2.0%.

Early in the day, markets in Asia and Europe slumped as oil rose to a multi-year high above $83 per barrel amid a surge in energy costs, escalating worries that major central banks will tighten monetary policy to stave off strong price increases.

Energy price increases have increased expectations for longer price increases. Therefore, rather than attempting to speed up recovery, central banks will be compelled to temper down the overheating, according to Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The U.S. private payrolls report, which is due at 8:15 a.m. ET, will be closely watched. The figures come before the more thorough non-farm payrolls report on Friday, which is anticipated to support the Federal Reserve’s decision to slow asset purchases.

According to Swissquotes Ozkardeskaya, any deterioration in the jobs report may push U.S. stocks back below their 100-dma levels since negative economic data would no longer be able to convince central bankers to maintain their dove stance.

Republicans and Democrats remain deadlocked over raising the debt ceiling, and President Joe Biden suggested that his party’s Democrats might create an exception to a Senate rule to allow them to do so without Republican support.

The Sandamp;P 500 index experienced 1% swings in either direction for the fourth straight day up until Tuesday’s close. The index hasn’t experienced as much volatility since November 2020, when it fluctuated by 1% or more for seven consecutive days.

At 6:44 a.m. ET, the Sandamp;P 500 was down 53 points, or 1.22%, the Nasdaq 100 was down 210.25 points, or 1.43%, and the Dow was down 358 points, or 1.05%.

After Goldman Sachs downgraded its rating of American Airlines Group from neutral to sell, the company’s shares fell by 3.9%.
Steelmaker Nucor Corp’s shares fell 3.3% after Goldman Sachs changed its rating from buy to neutral.
(This article was created automatically from a syndicated feed; it has not been edited by personnel at Business Standard.)

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