4:11pm: Benchmarks struggling to begin August
The Dow closed Wednesday down 191 points, 0.5%, at 35,124, the Nasdaq Composite lost 162 points, 1.2%, to 13,722 and the S&P 500 declined 32 points, 0.7%, to 4,468. The small-cap Russell 2000 index slid 17 points, 0.9%, to 1,930.
The benchmarks seemed to be recovering ground in the afternoon after a sluggish start to the session but tumbled again at the 11th hour.
Following a robust start to the summer, the Nasdaq Composite has fallen 4.3%, while the DJIA and S&P 500 are down 1.2% and 2.6%, respectively, since August 1. Investors are uncertain where things go from here, said Phillip Colmar, managing partner at MRB Partners
“The markets had run up a lot,” Colmar said. “It’s a bit of a wait-and-see, digestion phase.”
Traders are also looking ahead to Thursday’s CPI report, which is expected to show that inflation increased at a 3.3% annual pace in July. That would be its first acceleration since June 2022. The core measure, which strips out volatile food and energy prices, is expected to ease slightly to 4.7%.
12:00pm: US stocks retreat after subdued open
US stocks fell back sharply after a tepid start as investors preferred to stay sidelined ahead of tomorrow’s inflation print.
At midday, the Dow Jones Industrial Average was down 210.42 points, 0.6%, at 35,104.07, the S&P 500 was down 35.48 points, 0.8%, at 4,463.90 and the Nasdaq Composite was down 183.32 points, 1.3%, at 13,701.00.
Chris Beauchamp, chief market analyst at IG said: "US stocks have failed to display the same positive attitude as that of Europe today, with opening gains rapidly giving way to more losses."
"With China’s inflation data behind them, the focus now turns to tomorrow’s US data."
"This is giving traders an excuse to dump stocks again, in an attempt to lock in profits ahead of what appears to be the first real pullback in US equities for months.”
Penn Entertainment remained in favour, up more than 13% after the casino company said it was launching an online sportsbook with ESPN, called ESPN Bet.
But Roblox tumbled around 20% after missing Wall Street expectations for its second quarter. The video game streaming company posted a bigger then expected loss of $0.46c a share in the second quarter, and lower than expected average bookings per daily active users.
9:40am: Stocks little changed as investors await inflation pointer
US markets ticked narrowly into the red as trading kicked on Wednesday with investors nervously eyeing key inflation data that will help shape the outlook for the Federal Reserve’s next steps.
Shortly after the opening bell, the Dow Jones Industrial Average was down 15.01 points at 35,299.48, the S&P 500 was little changed at 4,497.85 and the Nasdaq Composite was down 23.60 points, 0.2%, at 13,860.72.
"A friendlier risk backdrop, which a weaker US CPI print could catalyze, is likely needed to push stocks higher," commented Stephen Innes at SPI Asset Management.
Thursday’s CPI report is expected to show that inflation increased at a 3.3% annual pace in July, marking the first acceleration since June 2022, while the core measure, which strips out volatile food and energy prices, is expected to ease slightly to 4.7%.
The Walt Disney Co rose 0.8% ahead of results after the closing bell Wednesday and after moving into the sports betting business, with ESPN inking a licensing deal with casino operator Penn Entertainment.
For its part, Penn shares soared leapt 11.6% but fears of increased competition saw Draftkings slide 7.6%.
WeWork Inc (NYSE:WE) slumped 20% as it continues to struggle with losses, requiring more cash to improve liquidity levels.
“As a result of the company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the company’s ability to continue as a going concern,” the group’s statement read.
7:00am: US markets set to recoup some of Tuesday's falls
Equities in the US look set to rally when trading gets under way in New York as investors look ahead to earnings from Disney and tomorrow’s key consumer price inflation print.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.2% higher, while those for the S&P 500 up 0.3%, and contracts for the Nasdaq 100 futures climbed 0.3%.
“A relatively quiet economic calendar sees traders await tomorrow's all-important US inflation report, with markets looking for CPI to turn higher after 12 consecutive months of declines,” said Joshua Mahony at Scope markets.
The consumer price index rose 3.0% on an annual basis in June, cooling from a 4.0% rise in May. It was the smallest 12-month increase since March 2021. Core inflation - which excludes items such as food and energy - was 4.8% in June, down from 5.3% in May.
According to FXStreet consensus, markets are expecting a 3.3% annual rise in CPI in July. Core inflation, however, is meant to cool slightly to a 4.7% rise.
The Walt Disney Co is in the spotlight ahead of financial third quarter results due after the closing bell.
Mahony said there are “concerns around streaming subscriber numbers and park visitors coming into focus.”
“While earnings are expected to rise against the previous quarter, there are concerns around the predicted decline made against the same quarter last year.”
On Tuesday, the firm announced a move into the sports betting business, with ESPN inking a licensing deal with casino operator Penn Entertainment.
ESPN has signed a licensing deal with Penn to create ESPN Bet, a sportsbook for audiences in the United States.
Shares in Penn soared 12% pre-market while Disney is 1.4% to the good.
Online retailer Amazon.com Inc (NASDAQ:AMZN) is in talks to become an anchor investor in Arm Ltd's initial public offering, according to Bloomberg.
Citing "a person familiar with the situation", Bloomberg said Amazon is in discussions to be an anchor investor in the IPO alongside other tech companies. The deal could raise as much as $10 billion.
Office space provider WeWork Inc (NYSE:WE) looks set to tumble after warning it could be on the brink of collapse as it continues to struggle with losses, requiring more cash to improve liquidity levels.
“As a result of the company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the company’s ability to continue as a going concern,” the firm said.
Shares were 16% lower in pre-market trading.