The major U.S. index futures are currently pointing to a lower open on Wednesday, with stocks likely to see further downside following the weakness seen in the previous session.
Ongoing uncertainty about the outlook for interest rates may weigh on Wall Street amid recent concerns the Federal Reserve won’t lower rates as early as previously anticipated.
Potentially adding to worries the Fed will hold off on cutting rates, the Commerce Department released a report this morning showing U.S. retail sales increased by more than expected in the month of December.
The report said retail sales climbed by 0.6 percent in December after rising by 0.3 percent in November. Economists had expected retail sales to advance by 0.4 percent.
Excluding a jump in sales by motor vehicle and parts dealers, retail sales rose by 0.4 percent in December after inching up by 0.2 percent in November. Ex-auto sales were expected to edge up by another 0.2 percent.
The Labor Department also released a report showing import prices in the U.S. unexpectedly came in unchanged in the month of December.
The Labor Department said import prices were unchanged in December after declining by a revised 0.5 percent in November.
Economists had expected import prices to decrease by 0.5 percent compared to the 0.4 percent drop originally reported for the previous month.
Meanwhile, the report said export prices slumped by 0.9 percent for the third consecutive month. Export prices were expected to fall by 0.6 percent.
The downward momentum on Wall Street also comes amid continue increase in treasury yields, with the yield on the benchmark ten-year note climbing further above 4.0 percent.
U.S. stocks closed notably lower on Tuesday as higher Treasury yields and concerns that the Federal Reserve may not cut interest rates anytime soon hurt sentiment.
The major averages all ended in the red, with the Dow finishing with a more pronounced loss. The Dow settled with a loss of 231.86 points or 0.6 percent at 37,361.12. The S&P 500 ended down 17.85 points or 0.4 percent at 4,765.98.
The Nasdaq, which managed a brief spell in positive territory around mid-morning, closed with a marginal loss of 28.41 points or 0.2 percent at 14,944.35.
In addition to digesting hawkish comments from some central bank officials, including from the Federal Reserve, investors also reacted to quarterly earnings updates from some major U.S. companies such as Goldman Sachs and Morgan Stanley.
Boeing shares dropped nearly 8 percent. The stock’s price declined after Wells Fargo downgraded the company amid ongoing issues with the 737 Max 9 model.
Morgan Stanley ended lower by more than 4 percent. Morgan Stanley’s fourth-quarter bottom line totaled $1.38 billion or $0.85 per share, compared with $2.11 billion or $1.26 per share a year ago.
PayPal, Moderna, Hewlett Packard, Nike, Warner Bros Discovery, Bakher Hughes, Delta Air Lines, Chevron, HP, Invesco, Textron, Netflix, United Airlines Holdings and Bank of America lost 2 to 4 percent.
Goldman Sachs gained about 0.7 percent. The lender reported fourth quarter net earnings of $1.87 billion of $5.48 per share, up from $1.19 billion or $3.32 per share in the year-ago quarter.
Advanced Micro Devices climbed more than 8 percent. The stock surged on upbeat analyst commentary on semiconductor demand.
Nvidia, Walt Disney, Dollar General, Seagate Technology, Verizon and Nucor gained 1 to 3.2 percent.
A report from the Federal Reserve Bank of New York said the NY Empire State Manufacturing Index plunged to -43.7 in January, the lowest reading since May 2020.