U.S. stock futures were little changed ahead of data expected to show the largest annual increase in prices in four decades, underscoring the broad inflation pressures affecting the economy.
Futures for the S&P 500 ticked up 0.1% Wednesday. The broad-market index rose Tuesday, snapping a five-day losing streak. Contracts for the tech-focused Nasdaq-100 added 0.3% and futures for the Dow Jones Industrial Average edged 0.1% higher.
In premarket trading, shares of shares dropped 9% after Medicare officials said they would cover its Alzheimer’s drug Aduhelm on the condition that patients were in clinical trials and had early-stage symptoms.
The yield on the benchmark 10-year Treasury note crept up to 1.746% Wednesday from 1.745% Tuesday, when the rally in government bond yields halted. Yields and prices move inversely.
The U.S. consumer-price index, a key measure of inflation, is forecast to top 7% annually for the first time since 1982 when figures for December are released at 8:30 a.m. ET.
The Federal Reserve appears poised to lift interest rates as soon as March due to concerns over a tight labor market and elevated inflation. Fed Chairman
called high inflation a “severe threat” to a full economic recovery Tuesday and said the central bank was preparing to raise interest rates because the economy no longer needed emergency support.
Stocks have seen choppy trading this week as investors assess the potential impact of sooner-than-anticipated rate rises and await clarity on when inflation may peak. When interest rates are low, investors tend to load up on risk assets such as stocks to generate returns. When inflation accelerates and policy makers raise rates, the value of companies’ future earnings drops and investors have more alternatives for places to make money. This particularly hurts technology stocks that promise expanding future profits.
“Inflation is uncomfortably high and this has had a negative impact on growth stocks,” said
chief strategist at Pictet Asset Management. He is waiting to see if higher inflation weighs on profits in the coming earnings season.
Overseas, the pan-continental Stoxx Europe 600 gained 0.4%, led by gains in the basic resources and oil and gas sectors. Shares of
fell 15% in Amsterdam trading after the health-technology company posted quarterly sales that were below expectations, citing global supply-chain shortages and the postponement of customer equipment installations.
Hong Kong-listed Chinese tech stocks like
and Meituan jumped Wednesday. Analysts and investors said there was no clear catalyst. Hong Kong’s Hang Seng Index surged 2.8% and China’s Shanghai Composite rose 0.8%.
Japan’s Nikkei 225 and South Kroea’s Kospi rallied 1.9% and 1.5%, respectively.
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