Stock futures exhibited a predominantly positive trend on Wednesday in anticipation of the September Consumer Price Index data. However, shares of memory-chip manufacturers experienced a continued decline, influenced by concerns regarding competition from China. Futures for the Dow Jones Industrial Average and the S&P 500 indicated increases of 0.4% and 0.2%, respectively. Nasdaq 100 futures exhibited a slight decline. Investors will closely monitor the release of the September Consumer Price Index at 8:30 a.m. It is anticipated that inflation will demonstrate a year-over-year increase of 3.6%, an uptick from the 3.4% annual rise recorded in August. “Core” CPI, which excludes volatile food and energy prices, is observed to have increased by 2.5%, a rise from the previous reading of 2.4%. Tomorrow, market observers will receive another assessment of the economy with the release of the wholesale Producer Price Index for September.
Ahead of the data, the 10-year Treasury yield stood at 5.20%, reflecting a decrease of two basis points from Tuesday’s close. Traders, as indicated by CME FedWatch, assign a 22% probability to the Federal Reserve raising interest rates at its upcoming meeting in two weeks. Furthermore, there is an 89% probability that the central bank will increase rates by at least a quarter-percentage point during its December meeting. Yesterday, the blue-chip Dow, tech-focused Nasdaq Composite, and benchmark S&P 500 concluded the day down by 0.4%, 0.2%, and a marginal amount, respectively, as the third-quarter earnings season commenced in earnest with several major banks-Goldman Sachs, JPMorgan Chase, Wells Fargo, and Citigroup-disclosing their results. All four stocks experienced a decline, with Citigroup recording the most significant drop at approximately 5.5%.
Several more large financial firms are reporting results today, including Bank of America, Morgan Stanley, and BlackRock. Late yesterday, Bank of America faced a penalty of $1.2 billion imposed by the U.S. Treasury Department due to purported violations related to money laundering. BlackRock shares experienced a 4% increase following the announcement of profit and revenue that exceeded analysts’ forecasts. U.S.-listed shares of Dutch firm ASML, which builds the machines semiconductor firms use to make chips, were little changed after it raised its full-year guidance again amid robust demand. Memory stocks declined for a third consecutive day following the announcement from Chinese firm CXMT over the weekend regarding a significant advancement in memory-chip production. SK Hynix, Micron Technology, Sandisk, Seagate Technology, and Western Digital all experienced declines in premarket trading, contributing to a 2% decrease in Roundhill’s Memory ETF. The broader iShares Semiconductor ETF was down roughly 1%.
Magnificent Seven mega-cap tech stocks Meta Platforms, Apple, and Nvidia rose less than 1% before the bell, contributing to a nearly 1% increase in the Roundhill Magnificent Seven ETF, which tracks the group. Oil prices experienced an uptick following a cautionary statement from the International Energy Agency regarding potential supply constraints extending into the following year. Additionally, an administrative facility belonging to Saudi Aramco, the state oil enterprise of Saudi Arabia, was targeted by Houthi rebels from neighbouring Yemen. U.S. benchmark West Texas Intermediate crude futures increased by 1.2% to $95.30 a barrel in recent trading, while front-month Brent crude futures, the international benchmark, rose by 0.8% to $106.50. Bitcoin was trading around 83,300, little changed over the past 24 hours. The U.S. dollar index, which monitors the value of the greenback relative to a selection of foreign currencies, increased by 0.1% to 102.23. Gold futures experienced a decline of 0.2%, settling at $4,165 per ounce.
