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three major U.S. stock indexes notched their biggest one-day
percentage declines since June 2020 on Tuesday after a hot
consumer price index report cemented bets that the Federal
Reserve could go ahead with the third straight 75 basis points
increase in rates next week.
Markets are currently pricing in a 37% chance of a massive 100
bps increase by the central bank and expects rates to peak at
4.34% by March 2023.
Stocks had rallied ahead of the inflation data as easing
commodity prices, especially oil, had raised hopes the Fed would
scale back its aggressive policy tightening even as policymakers
reiterated their determination to bring inflation to their 2%
target through rate hikes.
Focus turns to producer price index data due at 08:30 a.m. ET,
which is seen decelerating to 8.8% year-on-year in August, from
a 9.8% rise in July. It will be followed by monthly retail sales
data on Thursday.
At 6:23 a.m. ET, Dow e-minis were up 134 points, or 0.43%, S&P
500 e-minis were up 22.5 points, or 0.57%, and Nasdaq 100
e-minis were up 75.5 points, or 0.63%.
Rate-sensitive shares of technology and growth companies such as
Tesla Inc, Apple Inc, Amazon.com, Meta Platforms, Alphabet Inc
and Microsoft Corp advanced between 0.4% and 0.9% in premarket
trading after leading declines on Tuesday.
(Reporting by Ankika Biswas and Devik Jain in Bangalore; Editing
by Sriraj Kalluvila)
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