- US futures wobbled early Thursday after the Dow Jones and S&P hit new all-time highs on Wednesday.
- Investors are awaiting data from the Producer Price Index, which could provide more clarity on US inflation and therefore on the Fed’s path.
- Asian stocks fell as investor concerns over Chinese regulatory crackdowns resurfaced.
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U.S. equity futures were muted on Thursday after markets closed the regular session at new all-time highs as investors waited for new economic data to shed light on Federal Reserve policy.
Major index futures were broadly flat, S&P 500 futures up 0.02%, Nasdaq futures down 0.07% and Dow Jones futures up 0, 12% at 6:12 am ET Thursday.
The Dow Jones and the S&P 500 both closed at record highs on Wednesday after the release of US inflation data which generally arrived as analysts expected. The consumer price index for July rose 0.5%, at a slower pace than in June, easing investor concerns.
Some investors fear that with inflation at multi-year highs, the Fed may be prompted to start cutting its bond purchases as soon as possible. But the Fed has insisted it views higher inflation rates as transient.
San Francisco Fed Chairman Mary Daly said in an interview released Thursday that the central bank may start cutting its stimulus measures this year as it expects the US economy to continue its strong recovery post-pandemic in the coming months.
“The Federal Reserve could start to slow down its ultra-accommodative monetary stimulus by the end of the year, given the strength of the economic rebound,” she told the Financial Time.
A US report on the first weekly jobless claims is due later Thursday, likely to be watched by signs of a labor market recovery that could sway the Fed’s thinking.
An update on the Producer Price Index is expected later Thursday, which will give a reading of US inflation from a production perspective.
“If today’s US PPI figures for July follow a similar pattern to yesterday’s CPI, it could further strengthen the transitional narrative that the US Federal Reserve has been pushing for several months now,” Michael commented. Hewson, Chief Market Analyst at CMC Markets.
In Asia, the surge in cases of Delta coronavirus variants and associated lockdown restrictions continued to weigh on markets, as did signs of continued regulatory pressure from China.
âWhile regulatory threats have had a modest impact today, the lesson seems to be that gains on Chinese stocks will be limited for a while because of them. again, âsaid Jeffrey Halley, senior market analyst at Oanda, in a note.
Asian markets fell on Thursday, with Tokyo’s Nikkei 225 closing down 0.2%. The Shanghai Composite fell 0.22% and the Hong Kong Hang Seng Index ended the session down 0.82%.
European markets were initially mixed. The Frankfurt DAX climbed 0.22% for the last time, while the Euro Stoxx 50 gained 0.22%.
London’s FTSE 100 fell 0.15% after the second quarter reading of Britain’s gross domestic product was released, which showed the country’s economy grew 1% in June.
Oil prices fell Thursday ahead of the release of OPEC’s monthly oil market report, after rising the day before when the US Energy Information Administration announced that crude inventories had fallen. Brent crude was last down 0.11%, trading at $ 71.36 per barrel, while WTI crude fell 0.16%, to $ 69.14 per barrel.