US market futures continue to decline as rate cut bets are undermined by Powell and PPI data

U.S. stock index futures experienced declines during evening trading on Thursday, driven by robust producer inflation data and cautious comments from the Federal Reserve, which intensified uncertainty regarding the pace of interest rate cuts.

These losses in futures followed a negative trading session on Wall Street, as last week's risk-on rally lost steam and investors reassessed the likelihood of a December rate cut. Adding to the uncertainty, expectations grew around the potential inflationary impact of a second Donald Trump presidency, with the former president expected to pursue more inflationary policies.

By 18:25 ET (23:25 GMT), S&P 500 Futures dipped 0.2% to 5,966.25 points, while Nasdaq 100 Futures declined 0.3% to 20,945.50 points. Dow Jones Futures saw a 0.1% drop to 43,853.00 points.

Caution on Rate Cuts from Powell Amid Strong Inflation
Federal Reserve Chair Jerome Powell cautioned on Thursday that the strong performance of the U.S. economy provides the Fed with ample time to decide on lowering interest rates. Although Powell highlighted the economy's resilience, he also emphasized ongoing concerns over persistent inflation.

His remarks followed data indicating that the producer price index for October had increased more than anticipated, building on earlier data showing sticky consumer price inflation. As a result, traders adjusted their expectations for a December rate cut, with CME Fedwatch data reflecting a 51.7% probability that rates will stay unchanged and a 48.3% chance of a 25-basis-point cut.

The longer-term trajectory for interest rates also remains clouded by Trump's potential policy agenda, which could bolster inflation through protectionist trade and immigration measures.

On this sentiment, Wall Street retreated from record highs, while the U.S. dollar and Treasury yields experienced significant gains. The S&P 500 closed down 0.6% at 5,949.17 points, the NASDAQ Composite dropped 0.6% to 19,109.29 points, and the Dow Jones Industrial Average fell 0.5% to 43,750.86 points.

After-Hours Market Movements: Applied Materials Declines, Domino’s Rallies
In after-hours trading, notable moves included Applied Materials Inc (NASDAQ), which dropped nearly 6% after quarterly earnings fell short of some analysts' expectations, largely due to slowing revenue from China. Conversely, Domino’s Pizza Inc (NYSE) surged over 9% following the announcement that Berkshire Hathaway (NYSE) had acquired a stake. Pool Corporation (NASDAQ) also saw a 5.6% increase after Berkshire revealed its investment in the firm.

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Investing" all rights reserved by the original author.