Even after a survey revealed a slower-than-expected rise in inflation last month, stock futures opened marginally higher Tuesday evening after losing throughout the regular trading day, with September selling pressure returning to markets.
The S&P 500 contracts ticked above the flat line. Dow futures also remained stable after the index lost about 300 points during the regular trading day, resuming losses for the sixth time in seven sessions. Apple (AAPL) stock climbed in late trading after the firm announced its latest range of new products, which included the iPhone 13, as well as new iPad, iPad mini, and Apple Watch models.
Even after a lower-than-expected reading on inflation for August, which signaled that some of the steep price increases earlier this year were beginning to decrease, shares fell on Tuesday. The consumer price index (CPI), which excludes volatile food and energy prices, rose by just 0.1 percent in August compared to July, the weakest monthly growth since February, according to the Labor Department. Over the previous year, the core CPI grew less than projected.
However, price drops in things like ticket and hotel room rates, which were likely only briefly pushed down owing to fresh fears about the Delta variation, were the main drivers to the dip. Still, other experts believe that the slower-than-expected rise in consumer prices vindicates certain Federal Reserve policymakers’ beliefs that inflation will eventually prove temporary, and that it gives regulators greater leeway to leave existing monetary policies in place for longer.
“We probably won’t get the answer to whether it’s transitory or not probably until 2022 – that’s when the base effects will start to wash out and all the distortions start to kind of resolve themselves,” Sameer Samana, Wells Fargo Investment Institute senior global market strategist, told Yahoo Finance on Tuesday.
“What the number today tells us is that the Fed probably has a little more wiggle room,” he added. “If they don’t want to do something at the meeting next week, given the weaker-than-expected [August] payrolls number, the inflation number today, also takes the pressure off of them to do something next week.”
Still, investors continue to appraise a host of risks to the economic and equity outlook, with price pressures serving as only concern. And with U.S. equities still relatively close to all-time highs and the S&P 500 still up by more than 18% so far this year, jitters over the fundamental backdrop have only been intensifying.
“I do think we’re going to see a bit of an air pocket in concern from some of the companies going into year-end,” Chris Retzler, Needham small cap growth fund portfolio manager, told Yahoo Finance. “Supply chains are still certainly stretched. Semiconductors are a problem across almost every industry, and labor costs continue to be a problem. But looking a year out, I would think that those problems begin to abate, and that’s good for long-term investors.”
6:10 p.m. ET Tuesday: Stock futures tick up
Here were the main moves in markets as of Tuesday evening:
- S&P 500 futures (ES=F): +4 points (+0.09%) at 4,448.50
- Dow futures (YM=F): +21 points (+0.06%) to 34,604.00
- Nasdaq futures (NQ=F): +15 points (+0.1%) to 15,402.00
Source: Yahoo News