US equity futures are trading lower, the day after a sell-off and ahead of a consumer inflation report.
The main forward indices suggest a drop of 0.2% when Wednesday’s session begins on Wall Street.
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All eyes will be on the April Consumer Price Index Wednesday morning as markets continue to turn amid inflation concerns.
The Bureau of Labor Statistics is expected to say that the CPI rose 0.2% month over month in April, below the 0.6% peak in February. On an annual basis, watch for prices up 3.6%. It would be the fastest growth in nearly a decade and up a percentage point from the 2.6% increase in March. Factoring in volatile food and energy costs, the core consumer price index likely rose 0.3% last month and is expected to rise 2.3% annually.
In Europe, London’s FTSE rose 0.6%, Germany’s DAX gained 0.1% and France’s CAC was stable.
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Asian stock markets retreated on Wednesday as investors turned to US data which feared showing inflation is picking up.
Tokyo’s Nikkei 225 index fell 1.6%, Hong Kong’s Hang Seng fell 0.8% and China’s Shanghai Composite Index fell 0.6%.
On Tuesday, the Wall Street S&P 500 benchmark fell 0.9% on concerns that inflation could accelerate, hampering economic recovery and dragging stock prices.
Investor concerns are growing following the rise in the prices of industrial materials, particularly copper and crude oil.
|IS: DJI||MEDIUM DOW JONES||34269,16||-473,66||-1,36%|
|I: COMP||INDEX COMPOSITE NASDAQ||13389,426186||-12,43||-0,09%|
The S&P 500 fell to 4,152.19. The Dow Jones Industrial Average fell 1.4% on its worst day since February. The Nasdaq composite lost 0.1% to 13,389.43.
Commodity prices rose, especially for industrial metals like copper and platinum, as well as energy products like gasoline and crude oil.
Big tech companies were among the biggest declines for a second day. Tech stocks get most of their valuation from future earnings which could be less attractive if eroded by inflation.
Investors have been worried about inflation since bond yields surged earlier this year, although yields have mostly stabilized since then. The 10-year Treasury yield held edged up to 1.62% on Wednesday from 1.61% on Tuesday.
The Federal Reserve said the US economy would be allowed to “heat up” to ensure a recovery is established. Despite this, investors fear that rising prices could push central banks to withdraw stimulus measures and raise interest rates close to zero.
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In energy markets, benchmark US crude gained 49 cents to $ 65.77 per barrel on electronic trading on the New York Mercantile Exchange. The contract rose 36 cents on Tuesday to $ 65.28. Brent, used for the price of international oils, added 45 cents to $ 69.00 a barrel in London. It rose 23 cents from the previous session to $ 68.55.
The Associated Press contributed to this report.