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U.S. stock futures volatile after January inflation data

Published 02/14/2023, 07:01 AM
Updated 02/14/2023, 09:13 AM
© Reuters

By Scott Kanowsky

Investing.com -- U.S. stock futures pared back some early gains in choppy trading on Tuesday, as data showed that consumer price growth in the U.S. accelerated in January compared to the prior month, but moderated on an annual basis.

At 09:07 ET (14:07 GMT), the Dow futures contract rose 47 points or 0.14%, S&P 500 futures traded 6 points or 0.16% higher, and tech-heavy Nasdaq 100 futures inched up by 10 points or 0.03%.

According to the Labor Department, the U.S. consumer price index rose by a seasonally-adjusted 0.5% from 0.1% in December, partly reflecting an uptick in energy prices. The core number, which takes out volatile items like energy and food, increased by 0.4%.

Annually, the consumer price index for the month dipped to 6.4% from 6.5% in December - the seventh straight month of slowing expansion. Analysts had expected a reading of 6.2%.

The year-on-year core figure came in at 5.6%, down from 5.7% in the prior month and ahead of economists' predictions of 5.5%. The underlying number is closely eyed by many economic observers, including Fed officials, who believe that it provides a more accurate assessment of the future direction of inflation.

On Monday, with the data looming, the major indexes posted gains. The blue-chip Dow Jones Industrial Average closed up 377 points or 1.11%, the broad-based S&P 500 rose by 47 points or 1.14%, and the Nasdaq Composite rallied by 174 points or 1.48%.

Shares in Europe, particularly in Germany, France, and the U.K., are providing a strong handover to U.S. dealmaking. Helping the tone has been the data that showed the U.K.'s labor market remained relatively resilient despite the country's economic woes.

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The unemployment rate held at 3.7% in the three months to December, while the claimant count fell almost 13,000 in January, instead of rising by nearly 18,000 as expected. That said, the pace of growth in basic pay in Britain sped up again in the last three months of 2022, adding to the Bank of England's worries about inflationary pressures in the economy.

Meanwhile, a revised euro zone GDP release confirmed quarterly growth of 0.1% in the currency area in the final quarter of 2022, resulting in annual growth of 1.9%. The European Central Bank has raised interest rates by 3 percentage points since July and is expected to continue with at least another percentage point of increases before rates peak as inflation remains elevated.

In the corporate sector, Palantir Technologies Inc (NYSE:PLTR) reported its first-ever quarterly profit, as well as a top- and bottom-line beat in the final three months of 2022, as a ramp-up in customers bolstered performance. Shares in the data analytics firm were up more than 18% in premarket trading.

Other earnings stateside today include Coca-Cola Co (NYSE:KO) and Marriott International Inc (NASDAQ:MAR), as well as home-sharing website Airbnb Inc (NASDAQ:ABNB) after the bell.

Oil prices slipped Tuesday after the U.S. government surprised the market late Monday by saying it would release more crude from its strategic reserve.

The U.S. Department of Energy announced it would sell 26 million barrels of oil from its Strategic Petroleum Reserve, defying expectations that such a move would be delayed (or canceled) after the DoE released a record 180 million barrels from the reserve in 2022 to combat rising fuel prices.

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By 09:07 ET, U.S. crude futures fell 2.22% to $78.36 a barrel, while the Brent contract dipped 1.77% to $85.08 a barrel.

Additionally, gold futures traded 0.28% higher at $1,868.75/oz, while EUR/USD moved up by 0.24% to 1.0746.

Latest comments

Inflation should be over 8% by summer as oil surges and wages are forced higher by summer labor shortages.
It is so sweet to see the stock market skyrocket in January and inflation continue to go up. Happy Valentines.
Employment up good news...... Employment down good news.... unemployment claim up good news..... unemployment down good news ......earnings up good news ..... earnings down good news........ downsizing employees good news........hiring extra employees good news.......with all these analysts manipulative scam nothing is bad news anymore
Haha 😂Welcome to market
Never discount the American people. They know the government will take care of them…..
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