Equity futures fall as investors continue to mull over the April inflation report

US stock futures fell in pre-market trading on Thursday, following another day of downside in markets as investors processed inflation data showing price levels remained high in April.

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

Building on a series of sharp losses in equity markets, the moves track Wednesday’s consumer price index (CPI) from April, which showed inflation that remained high for nearly 40 years despite a marginal dip from the previous month. In addition, the so-called core price index, which excludes the volatile food and energy categories, came in higher than economists had expected, raising concerns among investors that high prices could persist.

The April inflation snapshot in the US comes as investors estimate how aggressively the Federal Reserve will intervene to curb rising price levels through monetary tightening, including rate hikes. Uncertainty about the central bank’s next move has led to turbulence over risky assets, pushing all three major indices to their lowest trading levels to date.

“Inflation appears to be entrenched in many parts of the economy and regardless of whether we have witnessed an inflation spike, a continued slow decline downwards will be more problematic for the Fed to simultaneously cool inflation without sending the economy into recession.” deposit,” said Charlie Ripley, a senior senior manager. investment strategist at Allianz Investment Management, said in an email note Wednesday.

Cleveland Fed president Loretta Mester told Yahoo Finance on Tuesday that rate hikes of 50 basis points were likely in the Federal Reserve’s next two policy-making meetings, while a 75 basis point hike would remain on the table as the central bank ramps up inflation. – mitigating efforts.

“It’s definitely going to be a challenge because there’s things going on on both the supply and demand sides,” Mester said. “But the inflation risks that remain high are going to get even more risky as we move forward because of inflation expectations, so it’s really important that we commit to doing what we need to do.”

Peter Essele, head of portfolio management at Commonwealth Financial Network, said that if inflation levels off in the second half of the year, there will be less pressure on the Fed to fight high price levels with aggressive monetary policy, “leaving open the possibility to a soft landing of the economy as opposed to the crash and burn that the markets have priced in lately.”

“The second half of the year could be a strong period for stocks and bonds if inflation continues to moderate and the magnitude of rate hikes falls below expectations,” Essele said in a note. “At the moment, investors are counting on a doomsday scenario with inflation and missing the wood for the trees.”

6:30 a.m. ET: Grocery Delivery Platform Instacart Files For IPO

According to a Bloomberg News report, Instacart Inc., the largest online grocery delivery service in the US, has submitted confidential documents for an IPO.

The company is reportedly working with banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the move, according to Bloomberg, citing people familiar with the matter, who indicated an IPO could take place as early as this year, though the timing could change.

Instacart, which grew strongly during the pandemic as people turned to online grocery shopping, has seen a recent slowdown in growth following the COVID boom as consumers return to in-person supermarket visits.

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

Smartphone with Instacart logo displayed can be seen in this illustration, taken March 25, 2022. REUTERS/Dado Ruvic/Illustration

Smartphone with Instacart logo displayed can be seen in this illustration, taken March 25, 2022. REUTERS/Dado Ruvic/Illustration

6:14 p.m. ET Wednesday: Stock futures rise higher after continued stock losses

Here’s where stock futures were in extended trading ahead of Wednesday’s overnight session:

  • S&P 500 futures (NL=F: +10.75 (+0.27%) to 3,941.00

  • Dow futures (YM=F: +76.00 (+0.24%) to 31,819.00

  • Nasdaq futures (NQ=F +30.50 (+0.25%) to 12,000.25

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

  • Gold (GC=F: -$1.90 (-0.10%) to $1,851.80 per ounce

  • 10-year treasury (^TNX: -7.2 fps to yield 2.9210%

A trader works on the floor of the New York Stock Exchange NYSE in New York, United States, May 5, 2022. US stocks collapsed Thursday as heavy selling on Wall Street mounted.  The Dow Jones Industrial Average fell 1063.09 points, or 3.12 percent, to 32,997.97.  The S&P 500 fell 153.30 points, or 3.56 percent, to 4,146.87 points.  The Nasdaq Composite Index lost 647.17 points, or 4.99 percent, to 12,317.69.  (Photo by Michael Nagle/Xinhua via Getty Images)

A trader works on the floor of the New York Stock Exchange NYSE in New York, United States, May 5, 2022. US stocks collapsed Thursday as heavy selling on Wall Street mounted. The Dow Jones Industrial Average fell 1063.09 points, or 3.12 percent, to 32,997.97. The S&P 500 fell 153.30 points, or 3.56 percent, to 4,146.87 points. The Nasdaq Composite Index lost 647.17 points, or 4.99 percent, to 12,317.69. (Photo by Michael Nagle/Xinhua via Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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