Wall St set for lower open after hotter-than-expected producer prices data

 Wall St set for lower open after hotter-than-expected producer prices data

By Bansari Mayur Kamdar and Johann M CherianWall Street was set to open lower on Friday as stronger-than-expected producer prices data lifted bond yields, weighing down rate-sensitive technology and growth stocks in premarket trading.

U.S. producer price index climbed 0.8% in the 12 months leading to July, up from a 0.2% rise in the previous month, as service costs increased. Economists polled by Refinitiv had expected a 0.7% gain.Bets for no rate hike in September slipped marginally to 88.5% from 90% before the data landed, though traders broadly expect the Fed to not tighten credit conditions further for the remainder of the year.

"The prior numbers were revised down so net it's really not that bad, but the market is going to focus on the current July data," said Robert Pavlik, senior portfolio manager, Dakota Wealth.Yield on the 2-year treasury note, that moves in line with near-term interest rate expectations, climbed to 4.8% after the data, pressuring rate-sensitive megacap growth names. "Maybe the Fed could raise rates by another 25 basis points in September," Pavlik added.

Tesla, Nvidia and Apple lost between 1.5% and 0.2% before the bell.Traders now await preliminary U.S. consumer sentiment data for August, due later in the day.Benchmark U.S. indexes finished marginally higher in the previous session as worries about the U.S. economy's longer-term prospects and concerns over further growth in stocks eclipsed milder-than-feared consumer prices data that had initially sent shares soaring.

At 8:48 a.m. ET, Dow e-minis were down 70 points, or 0.2%, S&P 500 e-minis were down 15.5 points, or 0.35%, and Nasdaq 100 e-minis were down 103 points, or 0.68%.The tech-heavy Nasdaq and the S&P 500 were on track to end their second week lower due to a decline in megacap growth and technology stocks that have led outsized gains this year.

U.S.-listed shares of Chinese companies Alibaba and JD.com fell 2.3% and 3.5%, respectively, as investors were disappointed by Beijing's latest stimulus measures, while fresh data showed that the post-pandemic recovery was losing steam.Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Additional reporting by Shashwat Chauhan; Editing by Vinay Dwivedi

The financial landscape is bracing for a potentially tumultuous session as Wall Street prepares for a lower open due to unexpected increases in producer prices. Investors are closely watching the fallout from the recent release of producer price index (PPI) data, which beat expectations. This rise in producer prices fueled concerns about inflationary pressures and set the stage for a cautious trading day. Let's dive into the details of this development and its potential impact on the markets.

Producer prices are rising surprisingly:

In a turn of events that surprised many, the latest data on the producer price index revealed a massive increase that far exceeded analysts' projections. This unexpected increase in producer prices is reflected in the financial sphere and has implications beyond the numbers alone.

Inflation jitters and market sentiment:

A significant increase in producer prices has sparked a new wave of inflationary fears. Inflation, which has been a key topic of discussion among investors and economists, is once again in the spotlight. Fears of erosion of purchasing power and escalation of costs are now heightened, leading to a cautious outlook among market participants.

As market sentiment adjusts to this new data, traders are likely to take a more conservative approach. The potential for higher input costs for manufacturers and businesses could squeeze profit margins and affect the company's overall profitability. As a result, investors are cautious when assessing the broader economic implications of these increased producer prices.

Anticipating Market Reaction:

Given the unexpected nature of the producer price spike, market experts expect a ripple effect across various asset classes. Equity, bond and commodity markets are all poised for potential corrections as investors digest the fallout from heightened inflationary pressures. Equity futures point to a lower open as concerns over increased costs and potential pressures on profit margins emerge. Industries that are particularly sensitive to input costs, such as technology and consumer discretionary, may experience increased volatility.

The fixed income market, which is sensitive to inflationary trends, could witness volatility in bond yields. Rising producer prices can lead to speculation about the Federal Reserve's monetary policy setting and potentially affect bond market dynamics. Inflation fears often drive investors to commodities such as gold and oil, which are seen as a hedge against erosion in purchasing power. As a result, these markets may experience increased activity and price movements.

Navigating Uncertainty:

In times of heightened market uncertainty, it is critical for investors to adopt a well-informed and balanced approach. Diversification, monitoring economic indicators, and monitoring central bank communications are all prudent strategies in times of market turbulence.

A surprise rise in producer prices sent a new wave of uncertainty to Wall Street, prompting expectations of a lower open. As markets grapple with the potential impact of heightened inflationary pressures, investors are advised to remain vigilant, cautious and flexible in the face of evolving economic conditions. The implications of these producer price data are a reminder of the interconnectedness of economic indicators and their profound influence on financial markets

The financial world is bracing for a potentially volatile trading session as Wall Street faces a lower open following the release of unexpectedly strong producer price data. Market analysts and investors are closely monitoring the impact of this economic indicator as it could signal potential shifts in the broader market environment. In this article, we dive into the details of the latest producer pricing report and examine the key words that help put this significant development into context. Wall Street, lower open, producer price data

Higher than expected producer prices:

The latest producer price data surprised many as inflationary pressures rose more sharply than expected. This information comes against the backdrop of ongoing discussions about the pace of the economic recovery, the Federal Reserve's policy decisions and the potential implications for various industries and market sectors. The increase in producer prices could lead to concerns about the wider economy, particularly in terms of the cost of goods and the potential impact on consumer spending. inflation, economic recovery, Federal Reserve, market sectors

Market reaction and investor sentiment:

As news of higher-than-expected producer prices spread, market futures indicated a lower open for Wall Street. The initial market reaction suggests that investors are taking a cautious approach and carefully evaluating the potential implications of this new inflation data. Market sentiment can be affected by a variety of factors, including corporate earnings reports, geopolitical developments and ongoing global supply chain issues. market futures, investor sentiment, corporate earnings, global supply chain

Some sectors of the market are likely to be more sensitive to producer price news. Industries such as manufacturing, raw materials and consumer goods may face increased scrutiny as investors assess the potential impact of rising costs on these industries. In addition, sectors that are highly dependent on energy or transportation could experience increased volatility due to the potential knock-on effects of increased production costs. manufacturing, raw materials, consumer goods, energy, transportation, volatility

Risk management and long-term strategy:

For traders and investors, risk management is paramount in times of market uncertainty. Diversifying portfolios, setting appropriate stop-loss levels and being informed about market trends and economic indicators are essential strategies during these periods. In addition, a long-term perspective can help investors overcome short-term volatility and capture potential opportunities that may arise from market fluctuations. risk management, diversification, stop-loss, market trends, economic indicators, long-term perspective

Higher-than-expected producer prices data set the stage for a lower opening on Wall Street, prompting market participants to carefully assess the potential implications for various sectors and industries. With the right risk management strategies and a focus on long-term goals, investors can navigate market fluctuations and make informed decisions. Staying up-to-date on economic data releases and market trends will be key in the coming days as the financial world reacts to these significant developments. financial world, market fluctuations, publication of economic data, informed decisions