U.S. Futures Dip Ahead of PPI and Unemployment Claims, Oil Prices Slide

U.S. index futures are down in Thursday’s pre-market trading, extending the decline seen the previous day. This movement comes after the release of a Consumer Price Index (CPI) above expectations, intensifying speculation that the Federal Reserve (Fed) may keep interest rates at high levels for an extended period, while the minutes from the last meeting of the Federal Reserve revealed that some officials still express concerns about the progress of inflation towards the established target.

At 6:23 AM, Dow Jones futures (DOWI:DJI) fell 111 points, or 0.29%. S&P 500 futures fell 0.31%, and Nasdaq-100 futures lost 0.25%. The yield on 10-year Treasury notes was at 4.548%.

In the commodities market, West Texas Intermediate crude oil for May fell 0.60% to $85.70 a barrel. Brent crude for June fell 0.46%, near $90.06 a barrel. Iron ore traded on the Dalian exchange rose 1.29% to $114.14 per metric ton.

Thursday’s economic schedule brings two relevant indicators to assess the health of the labor market and inflationary pressures in the economy. At 8:30 AM, data on weekly unemployment insurance claims will be released, with LSEG consensus anticipating about 215,000 applications. At the same time, producer prices are expected to be published, with LSEG projections indicating a monthly increase of 0.3% and an annual rise of 2.2%.

European markets are down, reflecting the analysis of international investors on the recent inflation indicators from the United States. Meanwhile, there is widespread anticipation of the imminent announcement by the European Central Bank (ECB) on its monetary policy, keeping market participants on alert.

Asian markets showed mixed performance, reflecting a variety of economic influences. Concerns about the possibility that interest rates in the United States will remain stable for an extended period put pressure on some markets in the region. However, in China, economic indicators showed a different trend. The country’s CPI showed a significant slowdown, with the annual rate dropping to just 0.1% in March, a sharp reduction compared to 0.7% in February and well below the market expectation of 0.4%. In addition, China’s PPI recorded a drop of 2.8%, aligning with forecasts.

In terms of market performance, China’s Shanghai SE saw a slight increase of 0.23%, while Japan’s Nikkei and Hong Kong’s Hang Seng Index retreated by 0.35% and 0.26%, respectively. South Korea’s Kospi advanced modestly with a 0.07% gain, while Australia’s ASX 200 fell 0.44%.

U.S. stocks fell sharply on Wednesday, influenced by a 0.4% increase in consumer prices in March, matching the increase observed in February. Economists had expected consumer prices to rise by 0.3%. The report also stated that the annual consumer price growth rate accelerated to 3.5% in March, up from 3.2% in February. Economists had anticipated a more modest acceleration to 3.4%. The Dow Jones, S&P 500, and Nasdaq recorded declines of 1.09%, 0.95%, and 0.84%, respectively. This scenario reinforced concerns about the continuation of high interest rates by the Federal Reserve, in a context of persistent inflation and reduced rate cut expectations for June to just 16.5%, according to the CME Group’s FedWatch tool.

For the quarterly earnings front, scheduled to present financial reports are Constellation Brands (NYSE:STZ), Carmax (NYSE:KMX), Fastenal (NASDAQ:FAST), Lovesac (NASDAQ:LOVE), Conn’s Inc (NASDAQ:CONN), Hooker Furnishings (NASDAQ:HOFT), Northern Technologies International Corporation (NASDAQ:NTIC), among others.

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