Equity futures were little changed on Wednesday night after another choppy session in the markets, with another batch of bank profits and labor market and inflation data due to be released Thursday.
S&P 500 contracts followed the flat line. Earlier, the blue chip index and the Nasdaq ended the session higher, led by a surge in tech stocks as Treasury yields retreated after a recent rise. Falling yields – with the benchmark 10-year yield falling below 1.55% after surpassing 1.62% just earlier this week – also catalyzed a decline in the financial sector, which was the biggest lag in the S&P 500 Wednesday.
Bank profits are expected to continue on Thursday with companies such as Bank of America (BAC), Morgan Stanley (MS) and Citigroup (C) releasing quarterly results ahead of the opening bell.
The results will follow a strong report from JPMorgan Chase on Wednesday. America’s largest bank by assets released third-quarter results that far exceeded estimates. Investment banking revenues grew more than expected, and the strengthening economic environment allowed the company to free up over $ 2 billion in previously set aside credit reserves to protect against potential client defaults. .
As the earnings season progresses in the coming weeks, investors will focus on comments from companies regarding price increases, supply chain disruptions and workforce issues. All of these factors were seen as contributing to a slowdown in earnings compared to the second quarter. However, the duration of these challenges and which companies will ultimately be hardest hit by these factors has been a central question for investors.
At the macro level, inflation has already been going on for months in various pockets of the economy. The Bureau of Labor Statistics (BLS) September Consumer Price Index (CPI) rose 5.4% in September from a year ago, reaching its fastest pace since 2008. A rise in the prices of rents, groceries and energy were particularly marked. The BLS is expected to release its Producer Price Index (PPI) on Thursday, which is expected to show producer selling prices rose 8.7% in September from a year ago, the fastest rate never recorded since 2010.
Federal Reserve policymakers have widely asserted that inflation during the recovery will prove transient and subside as supply bottlenecks ease. However, the string of above-target inflationary readings this year has called into question the views of officials on short-lived price pressures and contributed to concerns that the central bank may need to act faster and more aggressively than so far telegraphed to cause inflationary pressures. in line.
“What we are seeing is an economy that continues to run at full throttle”, Jeff Klingelhofer, Co-Head of Investments at Thornburg Investment Management, told Yahoo Finance Live. “Consumers today still have high savings, and they will reduce it in the months to come. cure, as vaccinations continue to rise and businesses open up, if this trend continues. “
“We will be monitoring these payroll figures with special attention – they are really the key to trying to figure out where the Fed is going and whether this inflation is transient in nature,” he added. “But at this point, we think it will moderate in the coming months and quarters.
6:04 p.m. ET Wednesday: Stock futures are little changed
Here’s where the markets were trading on Wednesday night:
S&P 500 Futures Contracts (ES = F): +1 point (+ 0.02%), at 4,356.00
Dow Futures (YM = F): -1 point (-0.00%), at 34,256.00
Nasdaq Futures (NQ = F): +10 points (+ 0.07%) to 14,774.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter