Stock futures decline ahead of PPI, jobless claims

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U.S. equity futures traded lower Thursday morning as selling continued after the consumer price index for April remained near a 40-year high, sparking concerns about a looming recession. 

The major futures indexes suggest a decline of 0.4% when the opening bell rings on Wall Street.

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Wednesday’s report from the U.S. Labor Department showed that inflation slowed a touch in April, down to 8.3% from 8.5% in March. Investors also found some glass-half-full signals in the data suggesting that the consumer price index, or CPI, may be peaking and set to ease further, but the numbers were still higher than economists forecasted.

INFLATION SOARS 8.3% IN APRIL, HOVERING NEAR 40-YEAR HIGH

Investors will get another inflation-related report Thursday morning.

The Bureau of Labor Statistics reports wholesale prices for April. The producer price index is expected to rise 0.5% month-over-month according to Refinitiv forecasts, down from 1.4% in March. Year-over-year, prices paid by wholesalers are anticipated to jump 10.7%, down from a record 11.2% annual surge in March. Factoring out volatile food and energy costs, core producer prices are anticipated to rise 0.6% monthly in April, down from 1.0% the prior month. Year-over-year, look for core PPI to jump 8.9% in April, below a record 9.2% surge in March.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York REUTERS/Brendan McDermid

At the same time the number of new claims for unemployment benefits will be released for last week. Expectations are for 195,000, down slightly from 200,000 the previous week and holding at pre-pandemic levels. Continuing claims, which track the total number of unemployed workers collecting benefits, are anticipated to edge down to 1.380 million, the lowest in more than 52 years.

Benchmark U.S. oil dropped $2.48 to $103.25 per barrel in electronic trading on the New York Mercantile Exchange. It gained 6% on Wednesday.

Brent crude, the international pricing standard, shed $2.18 to $105.34 per barrel. It added 4.9% the day before.

An early rally faded Wednesday, leaving the S&P 500 1.6% lower at 3,935.18. That wiped out gains from a day before, when the benchmark index snapped a three-day losing streak.

The Dow Jones Industrial Average dropped 1% to 31,834.11. The Nasdaq fell 3.2% to 11,364.24 as tech stocks weighed down the broader market. The three major indexes are each on pace for another sharp weekly loss.

DISNEY EXECUTIVES TOUT STRONG RESULTS ON SECOND QUARTER EARNINGS CALL

Shares of Disney fell 3% in extended-hours trading after initially rising on the earnings news. The world’s largest entertainment company posted earnings of $470 million, or 26 cents a share, down from $901 million, or 49 cents a share, a year earlier. Adjusted earnings were $1.08 a share, below analysts’ expectations of $1.19. Revenue for the quarter was $19.25 billion, compared with $15.61 billion a year earlier.

Disney+ start screen on mobile phone.  (iStock / iStock)

Disney also reported better-than-expected subscription numbers for its Disney+ streaming service in the most recent quarter, avoiding a slowdown that dogged streaming rival Netflix Inc.

Beyond Meat Inc. reported a wider-than-expected loss in its recently completed quarter because of higher spending, sending shares of the meat-alternative maker lower in after-hours trading.

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Bitcoin traded around $26,000.

In Asia, Tokyo's Nikkei 225 gave up 1.8%, Hong Kong’s benchmark fell 2.2% and China's Shanghai Composite index shed 0.5% .

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The 10-year Treasury yield climbed as high as 3.08% overnight but fell back to 2.90% early Thursday.

The Associated Press contributed to this report.

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