Futures tied to the Dow Industrial Average last added 63 points, or 0.2%, while S&P 500 futures rose 0.18% and Nasdaq 100 futures gained 0.15%. In Tuesday’s regular session, the Dow sank 1,276.37 points, or 3.94%, to close at 31,104.97, while the S&P 500 fell 4.32% to 3,932.69. The Nasdaq Composite fell 5.16% to 11,633.57. All major averages broke a four-day streak. The market moves came after August’s consumer price index report showed that headline inflation rose 0.1% month-on-month despite falling gas prices. The hot inflation report left questions about whether stocks could return to their June lows or fall even further. It also fueled some fears that the Federal Reserve could potentially hike even higher than the 75 basis points the markets are pricing in. “It caught the market off guard,” said Quincy Krosby of LPL Financial. “The market expected at least that we had leveled off – maybe not moving lower but certainly not moving higher. It was the wrong direction and the concern, of course, always translates to what that means for the Fed.” All 30 Dow stocks and S&P 500 sectors finished lower, led by communications services. The sector fell 5.6% and ended its worst day since February, trailing shares of big tech names like Netflix and Meta Platforms, which fell about 7.8% and 9.4%, respectively. A reading of the producer price index is due on Wednesday morning and could provide further clues on the state of inflation ahead of the Fed’s rate hike meeting next week.
