Stock futures sank on Wednesday morning, returning gains after the Nasdaq’s best day since August.
S&P 500 contracts fell as concerns about inflation and soaring energy and commodity prices outweighed optimism about the pace of the economic recovery. Tech stocks fell again and the Big Tech names “FAANG” each sank.
So far in October, stocks have fluctuated between large gains and losses as investors struggle to determine whether the economic and political environment will be favorable enough for risky assets to prevent a repeat of September’s volatility. The CBOE volatility index, or VIX, jumped to hold above 20, after spending much of the summer in the mid-teens.
“We don’t know exactly what October has in store. I have a big question in mind: could this be the ugly sequel to September?” Kristina Hooper, Chief Global Markets Strategist, Invesco US, said Yahoo Finance Live Tuesday.
“Certainly what we’ve seen so far is that whenever there is a massive sell-off, investors are quick to step in and find opportunities,” she added. “I guess we’re probably going to see more volatility in the future as we anticipate the Fed’s phased-down announcement. And that creates an announcement where investors can cost dollars the average on down days in the markets. areas where they want it and where they want it. are interested in increasing their exposure. This probably isn’t the only massive sale we’ll see for October. “
One of the main concerns of the markets is inflation, as the prices of goods and services increase for both businesses and end users as demand remains high and supply chain constraints continue to weigh. Traders were waiting to see if these lingering problems eventually weigh on economic activity and corporate earnings, with details on the latter due to focus with the unofficial start of the third quarter earnings season next week with the big banks.
At least for now, the latest batch of economic data has been largely bullish on the state of the US economy. Durable goods orders, retail sales and purchasing manager indices that track activity in the US manufacturing and services sector have all recently beaten expectations. However, this data also brought many signs of inflation: a sub-index tracking prices paid by suppliers rose in the latest Institute for Supply Management services index, and personal consumption spending rose. at the highest annual rate since 1991 based on government data released last week.
“It’s no surprise that global ‘stagflation’ is returning to everyone’s vernacular. Energy prices are rising, these freighters are piled up on both sides of the coast, shortages of everything … and these prices are rising. But the main news is good, “Simeon Hyman, head of investment strategy at ProShares Advisors, told Yahoo Finance Live on Tuesday.
“Is there going to be a little inflation? Probably. Are the rates going to go up? Just with a decrease, almost absolutely,” Hyman added. “But will there be a contraction in economic activity? Very unlikely – the economy should remain fairly strong.”
7:45 am ET Wednesday: Stock futures reverse price, Nasdaq heads to 1.4% decline
Here’s where the markets were trading ahead of the opening bell Wednesday morning:
S&P 500 Futures Contracts (ES = F): -49.85 points (-1.15%), to 4,284.25
Dow Futures (YM = F): -329.00 points (-0.96%), to 34,854.00
Nasdaq Futures (NQ = F): -195.75 points (-1.34%) to 14,459.50
Raw (CL = F): $ -0.38 (-0.48%) to $ 78.55 per barrel
Gold (CG = F): – $ 5.90 (-0.34%) to $ 1,755.00 per ounce
10-year cash flow (^ TNX): +1.4 bps for a yield of 1.545%
6:10 p.m. ET Tuesday: Stock futures hold their gains
Here’s where the markets were trading Tuesday night:
S&P 500 Futures Contracts (ES = F): +3.75 points (+ 0.09%), to 4,337.75
Dow Futures (YM = F): +50 points (+ 0.15%), at 34,233.00
Nasdaq Futures (NQ = F): +13.75 points (+ 0.09%) to 14,669.00
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter