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Tags: us stock futures | volatility | inflation | federal reserve rate hike

US Stock Futures Slip on Inflation, Rate Hike Worries

US Stock Futures Slip on Inflation, Rate Hike Worries
(AP)

Tuesday, 07 June 2022 06:53 AM EDT

U.S. stock index futures slipped on Tuesday on concerns over risks from rising inflation and the Federal Reserve's plan to further raise interest rates, while Kohl's Corp. rose on news about a potential sale.

Shares of the department store chain jumped 13.6% in premarket trading as it entered exclusive talks with retail store operator Franchise Group Inc over a potential sale that would value it at nearly $8 billion.

Megacap growth stocks retreated, pressured by U.S. Treasury yields, which hovered near 3-1/2-week highs ahead of inflation data on Friday. Tesla Inc. fell 1.4% and Microsoft Corp. 0.8%.

A hot reading on the consumer price index could bolster expectations that the Fed will continue to aggressively hike rates in the second half of this year, at a time when labor market is buoyant and consumers spending remain resilient.

Money markets are expecting 50-basis points rate increases next week and in July, and possibly in September too.

"There is quite a bit of uncertainty at the moment in terms of inflation and the growth outlook and until investors have a better idea of how high interest rates will go, equities are likely to struggle," said Raffi Boyadjian, lead investment analyst at brokerage XM.

World shares also fell as a surprise 50-basis-point rate increase in Australia raised concern over policy tightening, while oil prices hovered just below $120 a barrel on expected recovery in China demand.

U.S. stocks ended a choppy session slightly higher in the previous session, helped by gains in Amazon.com Inc and other megacap growth shares.

At 6:29 a.m. ET, Dow e-minis were down 172 points, or 0.52%, S&P 500 e-minis were down 25.5 points, or 0.62%, and Nasdaq 100 e-minis were down 107.75 points, or 0.85%.

The CBOE volatility index rose for the third straight day and was last up at 25.64 points.

© 2022 Thomson/Reuters. All rights reserved.


StreetTalk
U.S. stock index futures slipped on Tuesday on concerns over risks from rising inflation and the Federal Reserve's plan to further raise interest rates, while Kohl's Corp. rose on news about a potential sale.
us stock futures, volatility, inflation, federal reserve rate hike
304
2022-53-07
Tuesday, 07 June 2022 06:53 AM
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