Futures inch lower ahead of Fed announcement

[December 15, 2021]    By Shreyashi Sanyal

(Reuters) - U.S. stock index futures were subdued on Wednesday as the latest reading on inflation solidified bets that the Federal Reserve might announce a speedier wind down of its pandemic-era monetary stimulus later in the day.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 8, 2021. REUTERS/Brendan McDermid

The U.S. central bank is widely expected to signal a faster end to its bond-buying campaign and a quicker start to raising interest rates at the meeting. The statement will be released at 2 p.m. EST (1900 GMT), followed by Fed Chief Jerome Powell's news conference half an hour later.

Data on Tuesday showed producer prices increased more than expected in the 12 months through November, clocking its largest gain since 2010 and further adding pressure on the Fed.

A Reuters poll of economists is suggesting an interest-rate hike to 0.25-0.50% from near zero in the third quarter of next year, followed by another in the fourth quarter.

Wall Street's main indexes have had a softer start to the week after the S&P 500 index touched a record closing high on Friday, as worries about the new fast-spreading Omicron coronavirus variant gave investors pause.

Nasdaq 100 e-minis fell the most among Wall Street futures as shares of big technology firms, including Tesla Inc, Microsoft Corp, Netflix Inc, Apple Inc, Meta Platforms and Amazon.com Inc, slipped between 0.2% and 1.2% in premarket trading.

Shares of big banks such as Citigroup Inc, Morgan Stanley, JPMorgan Chase & Co, Bank of America and Wells Fargo & Co rose between 0.4% and 0.6%.

At 6:42 a.m. ET, Dow e-minis were up 12 points, or 0.03%, S&P 500 e-minis were down 3.75 points, or 0.08%, and Nasdaq 100 e-minis were down 53.5 points, or 0.34%.

Albemarle Corp and Livent Corp fell 4.5% and 6.6%, respectively, after Goldman Sachs downgraded both lithium producers to "sell" from "neutral".

On the economic front, U.S. retail sales data is expected to have risen 0.8% in November, after surging 1.7% in October. The report is due at 8:30 a.m. EST.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)

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