Stocks were lower as investors awaited the opening bell on Wall Street on Wednesday. The focus is on the release of consumer inflation data, which could influence the Federal Reserve’s next policy decision.
Futures on the Dow Jones Industrial Average and the S&P 500 both slid around 0.3%, while Nasdaq 100 futures were approximately 0.5% lower. This comes after the Nasdaq 100 retreated over 1% in the previous session.
August’s Consumer Price Index (CPI) report revealed a larger-than-expected increase in inflation. Headline prices rose 0.6% month to month and 3.7% on an annual basis, driven by the recent rally in energy prices.
This data represents the last inflation print that the Fed will receive before its meeting next week. It is seen as one of the most important data points for policymakers to consider in determining whether to maintain higher interest rates for a longer period.
The ongoing rise in oil prices, with WTI crude and Brent trading near 10-month highs, could potentially hinder the Fed’s efforts to cool inflation and is putting pressure on stocks.
Investor attention is also on the much-anticipated Arm IPO. Pricing for the offering is expected to happen on Wednesday, with trading set to begin in New York on Thursday. Reuters sources suggest that the British chip designer has opted to accept backing at the top end of its range or above.
In other news, Apple is in focus following the launch of the iPhone 15. China has flagged “security incidents” with the smartphone, but officials deny any moves to curb the use of iPhones in government departments and state-owned companies.
Additionally, the European Union has launched an investigation into the subsidies China provides to its electric vehicle (EV) makers. This move aims to prevent a flood of cheap imports. Shares in Europe’s auto sector initially rallied after the announcement, but fears of a Chinese backlash have caused them to lose ground.
Overall, the stock market remains cautious in light of the upcoming inflation data and uncertainties surrounding the Arm IPO and geopolitical tensions between China and the EU.
– Consumer Price Index (CPI): The Consumer Price Index measures the average change in prices over time of goods and services consumed by households. It is an important indicator of inflation.
– Dow Jones Industrial Average: A stock market index that measures the performance of 30 large, publicly traded companies in the United States.
– S&P 500: A stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States.
– Nasdaq 100: A stock market index that represents the performance of 100 non-financial companies listed on the Nasdaq stock exchange.
– Wall Street: The financial district in New York City, where the New York Stock Exchange and other major financial institutions are located.
– Federal Reserve: The central banking system of the United States, responsible for conducting monetary policy and regulating the banking industry.
– Arm IPO: The initial public offering of Arm, a British chip designer backed by Softbank. An IPO is when a private company offers its shares to the public for the first time, allowing investors to buy and trade those shares on a stock exchange.
– WTI crude and Brent oil: Two types of crude oil that serve as benchmarks for oil prices. WTI (West Texas Intermediate) is primarily produced and consumed in the United States, while Brent is produced in the North Sea and serves as a global benchmark.
– iPhone 15: The latest model of Apple’s iPhone, a smartphone that is popular worldwide.
– European Union (EU): A political and economic union of 27 European countries, aimed at promoting peace, stability, and economic prosperity among its members.