NEW YORK — Wall Street was pointing to small gains ahead of Wednesday’s opening bell as markets tried to break through a three-day selloff spurred by comments last week from Federal Reserve officials suggesting further rate hikes in interest were likely.
Futures Contracts for Benchmark S&P 500 gained 0.4% and Dow Industrials futures rose 0.2% before the bell.
Strong US jobs data also fueled expectations of further interest rate hikes. The Labor Department announced on Tuesday that there were two jobs for every unemployed person in July, giving arguments to Fed officials who argue the economy can tolerate more rate hikes to tame inflation that is at its peak. highest for several decades. Some investors had hoped the Fed would pull back on signs of slowing economic activity.
The jobs data “supported the argument that the Fed should stick to an aggressive stance,” Edward Moya of Oanda said in a report.
More employment reports are available later in the week, with data on unemployment benefits coming Thursday and the August jobs report due Friday. Analysts expect both to show a robust job market.
In Europe, markets fell after a report on Wednesday showed inflation in countries using the euro hit a new high in August, fueled by soaring energy prices mainly due to the war. from Russia to Ukraine.
The FTSE 100 in London fell 1.2%, the DAX in Frankfurt lost 0.3% and the CAC 40 in Paris fell 0.7%.
Annual inflation in the 19 countries of the euro zone reached 9.1%, against 8.9% in July, according to the European Union statistics agency Eurostat.
Inflation is at its highest level since the euro began recording in 1997. The latest figures add pressure on European Central Bank officials to keep raising interest rates, which can control inflation, but also stifle economic growth.
Investors fear that rate hikes by the Fed and central banks in Europe and Asia to calm inflation could derail global economic growth.
Fed Chairman Jerome Powell indicated on Friday that he would stick to rate hikes.
The Fed has raised rates four times this year. Two of them were 0.75 percentage points, three times the usual margin. Traders appear to be expecting another rise of 0.75 percentage points in September, half a point in November and 0.25 points in December, according to Moya.
“If the labor market doesn’t break down and the consumer remains resilient, Wall Street may start to price in rate hikes for February and March,” Moya wrote.
In Asia, the Shanghai Composite Index fell 0.8% to 3,202.14 after a manufacturing index showed a further contraction in activity in August. The Hang Seng ended less than 0.1% at 19,954.39 after spending most of the day in negative territory.
The Nikkei 225 in Tokyo fell 0.4% to 28,091.53 after industrial production in July unexpectedly rose 1% from the previous month.
South Korea’s Kospi gained 0.9% to 2,472.05 after July factory output fell 1.3% from the previous month.
The S of Sydney&P-ASX 200 fell 0.2% to 6,986.80. New Zealand rose while Singapore and Indonesia fell. Indian markets were closed for a holiday.
In energy markets, benchmark U.S. crude fell $2.70 to $88.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $5.37 to $91.64 on Tuesday. Brent crude, used to price international trade, fell $2.78 to $95.06 a barrel in London.
The dollar rose slightly to 138.76 yen from 138.67 yen on Tuesday. The euro fell to just under $1 from $1.0021.
Tuesday, the SThe &P 500 index fell 1.1%, bringing its decline over the past five days to 5.5%. The Dow fell 1% and the Nasdaq composite lost 1.1%.