Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

US pre-open: Futures higher following CPI-fuelled sell-off

(Sharecast News) - US futures were in the green before the open on Wednesday as stocks try to bounce back from yesterday's CPI-fuelled heavy sell-off. As of 1315 GMT, Dow Jones futures were up 0.26%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.48% and 0.66% firmer, respectively.

The Dow closed 524.63 points lower on Tuesday as hotter-than-expected inflation data weighed led to a sell-off that saw the Street register its worst day since March 2023 as traders worried that the Federal Reserve may not cut interest rates quite as early as initially hoped.

The consumer price index gained 0.3% in January versus December and was 3.1% higher year-on-year, with economists originally expecting to see a 0.2% and 2.9% increase, respectively. This means January's CPI reading likely pushes the likelihood of the central bank making any changes to interest rate policy out to the second half of the year - later on than previous expectations of a rate cut taking place as early as March.

Trade Nation's David Morrison said: "There was a mild state of panic amongst investors, many of whom had obviously forgotten that markets can go down as well as up. All the major US indices fell sharply, ending the session down over 1%, but off their lowest levels. However, the broad-based, domestically-focused 'mid cap' Russell 2000 plunged close to 4%. Will that be enough to drive out the weaker hands and reset the market, or should we expect more of a pull-back?

"There's been a mild recovery this morning, and there's little due out today that could act as a catalyst for a big market move. But tomorrow sees the release of retail sales, weekly unemployment claims and manufacturing surveys. Then on Friday we have the latest update on wholesale inflation. So, there are a few potential triggers which could drive volatility over the coming days."

On the macro front, mortgage applications fell 2.3% in the week ended 9 February, according to the Mortgage Bankers Association, cutting into the prior week's 3.7% increase and marking the second fall in mortgage demand so far this year. Applications to purchase a home fell 3% week-on-week, while those to refinance a home dropped 2%.

Still to come, Federal Reserve governor Michael Barr will deliver a speech at 2100 GMT.

In the corporate space, Lyft traded higher in pre-market after the ride sharing giant reported stronger-than-expected quarterly earnings, while online accommodation booking platform operator Airbnb was trading lower despite the company posting results that beat on revenue expectations for its latest quarter.

Cisco, Sony and Kraft-Heinz were all slated to report earnings on Wednesday.

Elsewhere, Bitcoin was trading more than 4% higher before the open, hitting its highest level in two years and pushing the bellwether cryptocurrency's market cap back over $1.0trn as the growing success of US spot bitcoin ETFs lifted investor sentiment.

Reporting by Iain Gilbert at Sharecast.com

Share this article

Related Sharecast Articles

London close: Stocks mixed as bargain hunters pick over FTSE 100
(Sharecast News) - London stocks showed a mixed performance by the close on Wednesday, with the top-flight index in the green as investors hunted for bargains after its four-week low on Tuesday.
FTSE 100 movers: Miners shine; Utilities slide
(Sharecast News) - FTSE 100 (UKX) 7,866.79 0.59%
Director dealings: Angus Energy CEO ups stake
(Sharecast News) - Angus Energy revealed on Wednesday that chief executive Richard Herbert had acquired 5.0m ordinary shares in the AIM-listed onshore oil and gas development firm.
Broker tips: AO World, Asos
(Sharecast News) - Analysts at Canaccord Genuity raised their target price on electrical retailer AO World from 52.0p to 75.0p on Wednesday after the group's trading update last week led the broker to adjust its FY24-26 estimates.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.