Stock futures tumble after inflation prints in line

US stocks tumbled on Thursday morning as investors digested new inflation data that showed prices rose at a slower annual rate in December, a report that was in line with economists’ expectations.

S&P 500 Index (^ The Salafist Group for Preaching and Combat(down by 0.6%, while the Dow Jones Industrial Average (^ DJI) decreased by 0.4%. Nasdaq Technology Heavy Composite (^ ix) slipped about 0.8%.

US Treasury yields fell. The yield on the 10-year US Treasury fell to 3.4% from 3.5% Thursday morning. The dollar index fell 0.51 percent to $102.66.

The moves came next Show data from the Bureau of Labor Statistics Prices in December decreased by 0.1% compared to the previous month but increased by 6.5% compared to the previous year. That was in line with expectations, as inflation eased year-on-year 7.1% a month ago.

Core CPI, excluding the volatile food and energy components, prices increased 5.7% year-on-year and 0.3% from the previous month. the Basic CPI reading It came in line as expected by Bloomberg economists’ forecasts.

The report will take heavy account of the Fed’s next monetary policy meeting, which begins on January 31. Central bankers have made it clear that they are not done raising interest rates. Federal Reserve Chairman Jerome Powell stressed on Tuesday The importance of stabilizing inflation, which may lead the central bank to take the necessary measures, even if they are not common.

On Wednesday, Boston Fed Leader Susan Collins A Interest rate of 0.25 pips Increase at the next meeting of the Central Bank. Echoing those comments, Philadelphia Fed President Patrick Harker He said on Thursday He believes that the interest rate increase should be 25 basis points “in the future”.

Fed policymakers took an aggressive path that included four consecutive three-quarter point adjustments. The Fed slowed down interest rate moves by half a point in December, but some market strategists are not betting that the central bank will make changes to interest rate decisions.

“To be clear, this CPI print should not change the Fed’s forecast for a 25 basis point hike in both February and March,” Andrew Tyler, US Market Intelligence team at JP Morgan, wrote in a note to clients.

“While we recognize that inflation expectations are now low, the Fed’s concern will likely be that, given the relative strength of the US consumer, you could see inflation accelerating higher if lending conditions ease,” he added.

Chairman of the Board of Governors of the Federal Reserve System, Jerome H. Powell, takes part in a panel discussion during a central bank symposium at the Grand Hotel in Stockholm, Sweden, Jan. 10, 2023. TT News Agency/Claudio Bresciani/via REUTERS ATTENTION EDITORS - This image was provided by third party.  Sweden is out.  There are no commercial or editorial sales in Sweden.  

Federal Reserve System Board of Governors Chairman Jerome H. Powell participates in a panel during the Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023. TT News Agency / Claudio Bresciani / via REUTERS

Elsewhere, Initial Jobless Claims in the first week of 2023 came in lower at 205,000 compared to forecasts at 215,000, while continuing jobless claims also fell to 1.63M compared to the previous week’s 1.694M.

In the market moves, Disney shares (dis) rose 2.3% as the media giant faces an upcoming proxy battle as shareholders voted against Activist investor Nelson Peltz In his efforts to win a place on the company’s board of directors.

KB main stakes (KBH) fell by nearly 5% after the homebuilder reported a loss in revenue and profits Net orders decreased And I dealt with a huge backlog of homes.

American Airlines (AALShares rose 5% after the carrier raised its prices Earnings tips for the fourth quarter. The company expects adjusted earnings per share of $1.12 to $1.17, up from a previous estimate of $0.50 to $0.70. It comes after a crash on Wednesday of the Federal Aviation Administration’s system turned into a nationwide standoff at US airports.

Investors continue to monitor shares of beleaguered retailer Bed Bath & Beyond (BBBY) With the increasing stakes of bankruptcy. The stock of the meme was up 18% Thursday morning.

Danny Romero, Yahoo Finance correspondent. Follow her on Twitter @employee

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