US stock futures edge higher along with bond yields, as 39-year-high inflation reading sinks in

It’s been a rocky year so far on Wall Street.

US stock futures inched higher Thursday after data showed inflation soared to 7% in December.
Bond yields also rose slightly as investors digested the hottest inflation reading since 1982.
One strategist said he expects the key US bond yield to hit 2% but for stocks to continue to rise.

US stock futures edged higher, having earlier fallen into the red, as investors digested data which showed inflation hit a 39-year high in December. Bond yields also rose.

S&P 500 futures were up 0.11%, Dow Jones futures were 0.06% higher, while Nasdaq 100 futures had risen 0.18% as of 5.50 a.m. ET.

Stocks rose Wednesday, despite the red-hot inflation reading, with the benchmark S&P 500 finishing 0.28% higher.

Year-on-year consumer price index (CPI) inflation hit 7% in December, according to data released Wednesday.

It was the biggest increase in prices since 1982 and the third straight month above 6%, although it was in line with analysts’ expectations.

Strong inflation has caused the Federal Reserve to pivot towards fire-fighting mode. Markets now expect the central bank to raise interest rates at least three times in 2022, starting in March, while many investors expect four or more hikes.

Expectations that the Fed will turn off the stimulus taps has caused volatility at the start of the year. Speculative tech stocks – which zoomed higher when interest rates were at rock bottoms – have been particularly hard hit. The tech-heavy Nasdaq 100 index was down 2.5% for the year as of Wednesday’s close.

  Supply chain woes could worsen as China imposes new COVID lockdowns

Fed Governor Lael Brainard said Wednesday that “inflation is too high”, in prepared remarks to Congress ahead of her confirmation hearing to become vice chair. In a sign of the Fed’s new focus, she said bringing down prices is the central bank’s “most …read more

Source:: Businessinsider

(Visited 1 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *