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Market Snapshot: U.S. stock futures point to further losses after inflation shock

U.S. stock futures on Friday pointed to further losses, as investors continued to react to the inflation data showing the fastest rise in 40 years.

What’s happening

Futures on the Dow Jones Industrial Average
YM00,
-0.42%

fell 149 points, or 0.4%, to 34990

Futures on the S&P 500
ES00,
-0.53%

dropped 0.6%, or 25 points, to 4472

Futures on the Nasdaq 100
NQ00,
-0.75%

fell 0.8%, or 114 points, to 14587

On Thursday, the Dow Jones Industrial Average
DJIA,
-1.47%

fell 526 points, or 1.47%, to 35242, the S&P 500
SPX,
-1.81%

declined 83 points, or 1.81%, to 4504, and the Nasdaq Composite
COMP,
-2.10%

dropped 305 points, or 2.1%, to 14186.

What’s driving markets

Thursday’s dramatic developments were still driving the action. The Labor Department reported that consumer prices jumped 7.5% in the 12 months ending January, as St. Louis Fed President James Bullard talked about his willingness for the central bank to start with a 50-basis point hike in March — or possibly even a rate hike before its next scheduled meeting.

That lifted the 2-year Treasury yield
TMUBMUSD02Y,
1.606%

by 21 basis points — the largest single-day rise since June 5, 2009.

Jim Reid, a strategist at Deutsche Bank, says it might be increasingly difficult for the U.S. economy to avoid falling into recession.

“With the surging U.S. CPI print yesterday the risks have to be skewed toward the U.S. curve inverting even earlier than that and starting the countdown clock earlier,” he said.

The University of Michigan’s consumer sentiment index for February is due for release, and the reading could reach a decade low due to elevated inflation.

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