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US stocks continue to fall ahead of inflation data

Wall Street suffered further losses on Wednesday as investors positioned themselves ahead of US Consumer Price Index data expected later today. Surveys show economists expect inflation in the world’s largest economy to accelerate again for the first time in more than a year, causing jitters on markets. 

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
NYSE building
© Shutterstock

In addition to inflation data, investors will also digest US weekly initial jobless claims on Thursday. Analysts will watch the data for signs of sufficient economic strength that could allow the US Federal Reserve’s (Fed) to continue down the path of its fastest rate hiking cycle in decades.

Recent developments in natural resource markets have suggested there may be more inflation pressure on the horizon, giving the Fed another reason to stick to its hawkish monetary policy. European natural gas prices spiked on Wednesday after workers at Chevron and Woodside in Australia voted to strike, which could affect exports, including supply to Europe. The strikes would be at gas facilities that cover around 10% of the global liquefied natural gas market. Last year, energy prices in Europe exploded on concerns about supply constraints after Russia invaded Ukraine in February 2022. The spike in European gas prices comes as Wednesday’s EIA Petroleum Status Report out of the US showed that the US government has began to restock its Strategic Petroleum Reserve. Investors were concerned that additional demand from the US could boost energy prices.

The Dow Jones Industrial fell 0.54% to 35,123.36 points on Wednesday and the S&P 500 lost 0.70% to finish at 4,4567.71 points. The Nasdaq-100 dropped 1.12%, closing at 15,101.71 points.

On the other side of the Atlantic Italian bank stocks came bouncing back on Wednesday, after the government announced a cap on its 40% windfall tax for the sector. The change to the policy came just one after the Italian government revealed the surprise tax on bank profits, causing Italian lenders’ stocks to plummet. UniCredit shares gained 4.37% on Wednesday and Intesa Sanpaolo finished the day up 2.33%.

In Asia, stock markets were mixed in early Thursday trading. In Tokyo, the Nikkei 225 was up 0.8% and in South Korea, the Kospi lost 0.3%. Hong Kong's Hang Seng Index was down almost 1%, while the Shanghai Composite was just slightly in the red. In Australia, the S&P/ASX 200 had made marginal gains.

Corporate news in focus: Quarterly and half-year figures from Zurich Insurance, Munich Re, Allianz, Deutsche Telekom, Thyssenkrupp, Siemens, Henkel, Novo Nordisk, Alibaba.

Economic data in focus: US Consumer Price Index (14:30 CET), US weekly initial jobless claims (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.