U.S. Stocks May See Further Downside Following Hotter-Than-Expected Inflation Data

After moving lower over the course of the previous session, stocks are likely to see further downside in early trading on Thursday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 417 points.

The future came under pressure following the release of the Labor Department’s highly anticipated report on consumer price inflation in the month of September.

The report showed consumer prices rose by more than expected in September, leading to a spike in treasury yields and ongoing concerns about the outlook for interest rates.

The Labor Department said its consumer price index rose by 0.4 percent in September after inching up by 0.1 percent in August. Economists had expected consumer prices to edge up by 0.2 percent.

Excluding food and energy prices, core consumer prices climbed by 0.6 percent for the second month compared to expectations for a 0.5 percent advance.

The report also showed the annual rate of growth by consumer prices slowed to 8.2 percent in September from 8.3 percent in August, although the annual rate of growth by core prices accelerated to 6.6 percent from 6.3 percent.

Meanwhile, a separate report released by the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 8th.

The Labor Department said initial jobless claims rose to 228,000, an increase of 9,000 from the previous week’s unrevised level of 219,000. Economists had expected jobless claims to inch up to 225,000.

The report showed the less volatile four-week moving average also crept up to 211,500, an increase of 5,000 from the previous week’s unrevised average of 206,500.

U.S. stocks failed to hold early gains and ended lower on Wednesday, with traders reacting to the minutes from the Federal Reserve’s most recent policy meeting and looking ahead to crucial consumer price inflation data.

Despite spending much of the day’s trading session in positive territory, the major averages all ended on a negative note.

The Dow, which climbed more than 200 points to 29,455.12 around noon, ended the day with a loss of 28.34 points or 0.1 percent at 29,210.85. The S&P 500 ended lower by 11.81 points or 0.3 percent at 3,577.03, off the day’s high of 3,608.34, while the Nasdaq, which advanced to 10,494.53, settled at 10,417.10, posting a loss of 9.09 points or 0.1 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.6 percent, while Hong Kong’s Hang Seng Index tumbled by 1.9 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slumped by 1.7 percent, the U.K.’s FTSE 100 Index is down by 1.1 percent and the German DAX Index is down by 0.4 percent.

In commodities trading, crude oil futures are falling $0.90 to $86.37 a barrel after plunging $2.08 to $87.27 a barrel on Wednesday. Meanwhile, after falling $8.50 to $1,677.50 an ounce in the previous session, gold futures are sliding $14.50 to $1,663 an ounce.

On the currency front, the U.S. dollar is trading at 147.44 yen versus the 146.91 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $0.9643 compared to yesterday’s $0.9703.

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