US pre-open: Futures trade lower as CPI reading weighs

Wall Street futures were in the red yet again on Thursday as last month's inflation reading continued to weigh on sentiment.

As of 1225 BST, Dow Jones futures were down 0.28%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.41% and 0.82% lower, respectively.

The Dow Jones closed 326.63 points lower on Wednesday as April's CPI data on Wednesday revealed that consumer prices had jumped 8.3%, higher than expected and close to a 40-year high of 8.5%.

The CPI reading led market participants to continue to offload risky assets such as tech stocks and bitcoin, with Apple stock heading south in the pre-market, pushing the tech behemoth into a bear market assuming the moves carry over to regular trading, while the benchmark cryptocurrency fell below $27,000 overnight.

AvaTrade's Naeem Aslam said: "US and European futures are trading lower as traders are primarily concerned about inflation and a hawkish monetary policy. For instance, yesterday, we had a real strong reading for the US CPI m/m, and this has sparked the conversation that the Fed in the US is more than likely to become even more aggressive with its monetary policy. Previously, the Fed Chairman, Jerome Powell, said that the Fed will not increase the interest rate by 75 basis points. Still, given the fact that inflation is showing no signs of slowing down, the Fed will do everything in its power to reduce that."

The yield on the benchmark 10-year Treasury note also continued to march lower ahead of the opening and bell to trade at 2.838%.

On the macro front, April's producer price index will be published at 1330 BST, as will weekly jobless claims data from the Labor Department.

In corporate headlines, Disney shares traded lower prior to the open after posting mixed earnings results overnight, with higher-than-expected streaming subscriber growth being paired with a warning regarding the impact of Covid-19 lockdowns on its Asian theme parks.

As far as Thursday's earnings were concerned, Six Flags beat estimates with its first-quarter earnings per share and revenues of $1.04 and $138.0m, respectively.

Reporting by Iain Gilbert at Sharecast.com