Stock futures opened near the flat line Tuesday evening as investors looked ahead to more corporate earnings results and another batch of inflation data.
Contracts on the S&P 500 was little changed. During Tuesday’s regular session, the blue-chip index rose to a record intraday high before pulling back and ending lower. Each of the Dow and Nasdaq also pulled back, with cyclical areas of the market like airline stocks and financials posting some of the biggest declines.
Concerns over the pace of the economic recovery were back in focus on Tuesday with the release of hotter-than-expected print on consumer price inflation, which registered the fastest annual increase since 2008 and suggested stubbornly high prices could derail the recovery. The 10-year Treasury yield moved higher following the report to break back above 1.4%. Investors are also nervously eyeing the global spread of the Delta variant of the coronavirus.
Analysts have been split over just how transitory inflationary pressures in the market will ultimately end up being, and for how long the Federal Reserve will be able to shrug off rising prices before making a monetary policy move. Bank of America’s Alexander Lin wrote in note to clients that the firm doesn’t believe the consumer price index (CPI) “report changes much for the Fed,” while ING economist James Knightley said the blowout inflation reading “makes it increasingly difficult for the Fed to stick to its position that elevated inflation readings are merely ‘transitory.”
