Stocks looked set for another losing day on Wall Street on Wednesday, as lingering concerns about inflation spurred doubts the Federal Reserve will decide to cut interest rates any time soon.
Futures on the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) both slipped around 0.2%. The tech-heavy Nasdaq 100 was down 0.3%.
WTI crude oil (CL=F) is trading around its highest level in nine months, after touching $90 on Tuesday after Saudi Arabia and Russia stuck with output cuts. That reignited worries about “sticky” inflation and weighed on stocks, helping push all three major US gauges to close lower on Tuesday.
With the Fed’s September 20 meeting on the horizon, investors are debating whether those price pressures will convince policymakers to keep rates higher for longer.
At the same time, downbeat data out of Europe and China is driving worries about crumbling demand, which could undermine the resilience the US economy has shown so far. A surprisingly sharp fall in German industrial orders in July fueled speculation of a risk of stagflation.
Given that, eyes will be on fresh PMI data on the US services sector in August due later Wednesday. Both ISM and S&P Global’s reports will be closely watched for signs of inflation. Also on deck is the release of the latest Fed Beige Book.
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