(Bloomberg) — Stock futures retreated after data showed the biggest-ever annual jump in producer prices, increasing pressure on the Federal Reserve to tighten monetary policy.
S&P 500 contracts extended losses, while Nasdaq 100 futures tumbled. The report came after Friday’s reading on consumer inflation, which rose at the fastest pace in nearly 40 years. Treasuries and the dollar fluctuated.
“There is risk now that inflation has become entrenched in households’ psyches, which further pressures policy makers at the Fed to be more aggressive in their tightening stance,” wrote Danielle DiMartino Booth, chief strategist of Quill Intelligence.
Traders will be watching the Fed’s policy decision Wednesday for clues on the timing of tapering stimulus and raising interest rates. The European Central Bank and the Bank of England are also among 20 central banks meetings this week that could stir market swings. Investors are grappling with the implications of reduced monetary policy support while awaiting more clarity on the economic threats from the omicron virus variant.
Corporate highlights:
- Elon Musk made more headway toward his pledge to sell 10% of his Tesla Inc. stake, and it may have cost the carmaker its $1 trillion valuation.
- Shares of U.S.-listed Chinese firms declined as a selloff in the stocks and bonds of Chinese property firm Shimao Group Holdings Ltd. hit sentiment.
- Apple Inc. analysts just keep getting more bullish, with Bank of America Corp. on Tuesday upgrading the iPhone maker to buy on the revenue opportunity from virtual reality products.
- 3M Co. agreed to separate its food-safety business and join it with Neogen Corp. in a deal that would value the combined company at about $9.3 billion.
Here are some key events this week:
- China releases November industrial output, retail sales data, Wednesday.
- Fed rate decision, Wednesday.
- U.S. business inventories, retail sales, empire manufacturing, Wednesday.
- BOE rate decision, Thursday.
- ECB rate decision, Thursday.
- U.S. housing starts, initial jobless claims, industrial production, Thursday.
- BOJ monetary policy decision, Friday.
- S&P Dow Jones Indices quarterly rebalance effective after markets close, Friday.
- “Quadruple witching” day in the U.S. market, when options and futures on indexes and equities expire, Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.6% as of 8:50 a.m. New York time
- Futures on the Nasdaq 100 fell 1.1%
- Futures on the Dow Jones Industrial Average fell 0.3%
- The Stoxx Europe 600 fell 0.4%
- The MSCI World index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.3% to $1.1313
- The British pound rose 0.1% to $1.3236
- The Japanese yen was little changed at 113.50 per dollar
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.43%
- Germany’s 10-year yield advanced one basis point to -0.37%
- Britain’s 10-year yield advanced one basis point to 0.71%
Commodities
- West Texas Intermediate crude fell 1.1% to $70.48 a barrel
- Gold futures fell 0.9% to $1,773 an ounce
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