Stock market today: Stocks drop as inflation fears resurface

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Updated at 9:00 a.m. EST

US equity futures edged higher on Wednesday as stocks seek to extend their two-day rally amid a fresh round of disappointing UK inflation data that undermined investor sentiment and pushed the dollar higher. up compared to its global peers.

Britain’s inflation rate in September hit a new 40-year high of 10.1% last month, official figures showed on Wednesday, which should trigger faster and deeper rate hikes from the Bank of England.

Normally, markets would beat regional inflation figures, but with the BoE about to start selling bonds off its multi-trillion balance sheet, and the government still in chaos after scrapping its age-old economic plans. Several weeks, investors fear that the turmoil inside Britain could once again spread to the wider financial system.

The US dollar index, which tracks the greenback against a basket of global currencies and often serves as a proxy for broader risk sentiment, rose 0.47% overnight to 112.660 while yields Benchmark 10-year Treasury bonds added 8 basis points to change hands at 4.11%, the highest since 2008.

That leaves investors in a relatively defensive mood heading into Wednesday’s session, with housing and mortgage data due before trading begins and third-quarter earnings from Tesla and IBM expected after the bell. fencing.

The CBOE Group’s key volatility indicator was also in motion, rising from yesterday’s levels at 31.26 points, suggesting daily swings of around 72.7 points over the next 30 days for the largest benchmark. American.

The Mortgage Bankers Association posted another jump up in benchmark mortgage rates, which sat just below the 7% level amid a rise of more than a full percent since early August.

Government data also shows an 8.1% slowdown in housing starts, which hit an annualized rate of 1.439 million units, as projects are delayed due to continued soaring construction costs and falling demand. related to rising mortgage costs.

Oil markets will also be in focus Wednesday ahead of the Energy Department’s weekly inventory data, due at 10:30 a.m. EST, as well as details of President Joe Biden’s plan to sell the remaining portion of the crude taken from the 180 million barrels taken from the strategic petroleum reserve earlier this year.

WTI crude futures rose 84 cents Wednesday morning to $83.66 a barrel, while Brent contracts for December added 79 cents to $90.86 a barrel.

On Wall Street, futures tied to the S&P 500, which has gained 6.3% since Thursday’s open, point to an opening low of 20 points while those tied to the Dow Jones Industrial Average are priced lower. of 120 points. The tech-focused Nasdaq is priced for a 62-point gain.

netflix (NFLX) Shares jumped 13.2% after the streaming and media service shocked investors with much better-than-expected third-quarter earnings ahead of the launch of its ad-supported platform.

You’re here (TSLA) Shares rose 1.3% ahead of the clean-energy automaker’s third-quarter results after the closing bell. Tesla is expected to report net income of $1 a share, down 62 cents from the same period last year, on record revenue of $21.96 billion.

United Airlines Holdings (LAU) Shares, meanwhile, gained 5.8% after the carrier posted stronger-than-expected third-quarter earnings while forecasting stronger year-end earnings on the continued surge in global demand. of travel.

Procter & Gamble (PG) gained 1.6% after posting stronger-than-expected first-quarter earnings, but cut its full-year sales forecast on headwinds from a rising U.S. dollar.

Equities in Europe were mixed, with London’s FTSE 100 little changed during the session and the region-wide Stoxx 600 falling 0.28% at the start of the Frankfurt session. Overnight in Asia, the Japanese Nikkei 225 ended up 0.37% as the yen fell to a new 32-year low of 149.184 against the dollar, while the MSCI index outside Japan fell of 1.11% in the last hours of trading.

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