Wall Street pointed to small gains before opening early on Friday after investors got more worrying inflation data from Europe as they awaited a report from the US government on consumer spending.
Dow Jones Industrial Average futures rose 0.1% and S&P 500 futures rose 0.3% after the benchmark fell to its lowest level in nearly two years Thursday.
Wall Street will turn its attention on Friday to a report on consumer spending from the Commerce Department that may provide insight into the most recent levels of inflation.
Last month’s report showed consumer prices rose 6.3% in July from a year earlier after posting a 6.8% annual increase in June, the biggest jump since 1982. Falling energy prices helped push prices down in July, raising hopes that soaring costs for everything from gasoline to food may have peaked.
There is lingering hope that the Fed could signal a moderation in rate hikes if inflation were to show further signs of slowing.
In the United States, the Commerce Department’s personal consumption expenditure (PCE) index is less well known than the Labor Department’s consumer price index (CPI).
But the Fed prefers the PCE index as an indicator of inflationary pressures, in part because the Commerce index tries to measure how well consumers are adjusting to rising prices, such as replacing cheaper store brands. by more expensive brands.
Shares of Dow-component Nike Inc. fell 11% in premarket trading after the footwear and apparel company announced late Thursday that stocks were up 44% from a year ago .
Global stocks were mixed on Friday after a report showed inflation in the 19 countries that use the euro hit a record high and data out of China indicated factory activity there had slowed. weakened.
Inflation in Germany, France and other eurozone countries accelerated to 10% in September from 9.1% the previous month, statistics agency Eurostat reported. This is the highest level since euro record keeping began in 1997.
Investors are increasingly concerned that the global economy could tip into recession following aggressive interest rate hikes this year by the US Fed and central banks in Europe and Asia to calm inflation which is at its highest for several decades.
Markets fell this week after British Prime Minister Liz Truss announced plans to cut taxes that investors fear will push inflation higher. Meanwhile, global export demand is weakening and Russia’s attack on Ukraine has disrupted oil and gas markets.
“We would be inclined to say we haven’t seen the bottom yet,” ING economists said in a report.
On Thursday, German Chancellor Olaf Scholz said the world’s fourth-largest economy faced a “double whammy” from inflation and soaring energy prices.
By noon, the FTSE 100 in London rose 0.2% and the DAX in Frankfurt advanced 0.3%. The CAC 40 in Paris gained 0.6%.
The S&P 500 fell 2.1% to its lowest level in nearly two years on Thursday after strong US jobs data bolstered expectations that the Federal Reserve will stick to plans further interest rate hikes.
The Dow Jones slid 1.5% and the Nasdaq composite lost 2.8%.
In Asia, the Shanghai Composite Index fell 0.6% to 3,024.39 after surveys of manufacturers showed industrial production, new export orders and manufacturing employment fell in september.
The Nikkei 225 in Tokyo fell 1.8% to 25,937.21 and the Hang Seng in Hong Kong gained 0.5% to 17,257.08. Seoul’s Kospi fell 0.7% to 2,155.49.
Sydney’s S&P ASX 200 fell 1.2% to 6,474.20 while India’s Sensex rose 1.8% to 57,421.45. Markets in New Zealand and Southeast Asia declined.
Stock markets and the value of the pound rebounded on Wednesday after the Bank of England said it would buy government bonds to support their price. But markets resumed their slide on Thursday after Truss shrugged off criticism and defended his tax cut plan despite a call from the International Monetary Fund to reverse the trend.
The S&P 500 is on track to end September with an 8% loss for the month. It is down more than 20% for the year as investors wait for a break in inflation that prompted the Fed to raise interest rates five times.
The yield on a two-year US Treasury note, or the difference between its market price and the payment at maturity, briefly widened to 4.2% before falling back to 4.16% on Thursday morning against 4.14% on Wednesday.
Stronger-than-expected U.S. jobs data on Thursday bolstered expectations that the Fed will feel comfortable sticking to plans for further interest rate hikes and keeping them elevated through the coming months. next year.
In China, surveys of manufacturers by business news magazine Caixin and an official industry group found that production and new export orders had fallen. This was in line with expectations that a Chinese manufacturing boom would fade due to weak global demand.
“The slowdown in external demand is expected to worsen,” Capital Economics’ Zichun Huang said in a report.
In energy markets, benchmark U.S. crude gained 27 cents to $81.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 92 cents on Thursday to $81.23. Brent crude, used to price international oils, rose 21 cents to $87.39 a barrel in London. It was down 83 cents the previous session at $88.49.
The dollar rose slightly to 144.55 yen from 144.43 yen on Thursday. The euro fell back to 97.62 cents from 97.90 cents.
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McDonald’s reported from Beijing; Ott from Washington.