The major U.S. index futures are currently pointing to a sharply lower open on Wednesday, with stocks likely to come under pressure amid a negative reaction to a highly anticipated report on consumer price inflation.
The futures plunged following the release of a Labor Department report showing U.S. consumer prices advanced by slightly more than expected in the month of March.
The Labor Department said consumer prices climbed by 0.4 percent in March, matching the increase seen in February. Economists had expected consumer prices to rise by 0.3 percent.
Excluding prices for food and energy, core consumer prices still rose by 0.4 percent for the third consecutive month. Core consumer prices were also expected to increase by 0.3 percent.
The report also said the annual rate of consumer price growth accelerated to 3.5 percent in March from 3.2 percent in February. Economists had expected a more modest acceleration to 3.4 percent.
Meanwhile, the annual rate of core consumer price growth came in at 3.8 percent in March, unchanged from February. Core price growth was expected to slow to 3.7 percent.
The data is likely to add to recent worries the Federal Reserve will hold off on lowering interest rates amid ongoing inflation concerns.
Fed officials have repeatedly said they need greater confidence inflation is slowing before they consider cutting rates.
Treasury yields have surged in reaction to the report, with the yield on the benchmark ten-year note jumping to its highest levels in almost six months.
Later in the day, the Fed is due to release the minutes of its latest monetary policy meeting, which may shed additional light on the outlook for interest rates.
Following the lackluster performance seen on Monday, stocks saw considerable volatility over the course of the trading session on Tuesday. The major averages fluctuated as the day progressed, with the Nasdaq and the S&P 500 eventually closing in positive territory.
While the Nasdaq rose 52.68 points or 0.3 percent to 16,306.64 and the S&P 500 inched up 7.52 points or 0.1 percent to 5,209.91, the narrower Dow ended the day slightly lower, edging down 9.13 points or less than a tenth of a percent to 38,883.67.
The volatility on Wall Street came as traders continued to look ahead to the release of the Labor Department’s report on consumer price inflation.
“The signs are clear for investors to see, but many have been choosing to ignore them,” he added. “The Fed putting it into black and white could be a difficult pill for investors to swallow, so brace yourself for turbulence on the market this week.”
Gold stocks showed a significant rebound following the pullback seen on Monday, driving the NYSE Arca Gold Bugs Index up by 1.9 percent to a nearly eleven-month closing high.
The strength among gold stocks came amid an increase by the price of the precious metal, which climbed to a new record high.
Considerable strength also emerged among biotechnology stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Biotechnology Index.
Networking, commercial real estate and telecom stocks also showed notable moves to the upside, while energy stocks saw some weakness amid a steep drop by the price of crude oil.