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Benchmark U.S. indexes finished marginally higher in the
previous session as worries about the U.S. economy's longer-term
prospects and concerns over further growth in stocks eclipsed
milder-than-feared consumer prices data that had initially sent
shares soaring.
Investors are now focused on the producer prices data due at
8:30 a.m ET that will offer more insight into inflation in the
world's largest economy.
U.S. Labor Department's producer price index (PPI) for final
demand, is expected to rise 0.2% in July, after growing 0.1% in
June. In the 12 months through July, the PPI likely climbed
0.7%, after logging a 0.1% year-on-year rise in June.
"Another reading which suggests inflationary pressures are
easing could lift sentiment," said Russ Mould, investment
director at AJ Bell.
"This (PPI) data set is something of a crystal ball for consumer
price inflation; when producers charge more for goods the higher
costs are usually passed on to households."
The U.S. consumer sentiment data is also due later in the day.
At 7:03 a.m. ET, Dow e-minis were up 7 points, or 0.02%, S&P 500
e-minis were down 2.75 points, or 0.06%, and Nasdaq 100 e-minis
were down 24 points, or 0.16%.
The tech-heavy Nasdaq and the S&P 500 are on track to end their
second week lower as a jump in U.S. bond yields weighed on
rate-sensitive megacap growth and technology stocks that have
led outsized gains this year.
The yield on the benchmark U.S. 10-year Treasury note rose to
4.09%, pressuring growth stocks such as Nvidia and Tesla in
premarket trading.
"Amid runaway government deficits and the Treasury increasing
its debt issuance both in size and duration, the balance of
power seems to be shifting in favor of higher yields," said
Marios Hadjikyriacos, senior investment analyst at forex broker
XM.
"Higher yields incentivize investors to park their cash in the
safety of bonds, and therefore decreases demand for risky plays
like equities."
U.S.-listed shares of Chinese companies Alibaba and JD.com fell
2.1% and 3.7%, respectively, as investors were disappointed by
Beijing's latest stimulus measures, while fresh data showed that
the post-pandemic recovery was losing steam.
(Reporting by Bansari Mayur Kamdar and Johann M Cherian in
BengaluruEditing by Vinay Dwivedi)
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