Dow Futures Fall 15 Pts; Subdued End to August

© Reuters.

By Peter Nurse

AiVIF.com -- U.S. stocks are seen opening in a subdued fashion Wednesday on the last trading day of the month, stabilizing after the recent selloff on concerns that continued interest rate increases will severely stifle economic growth.

At 07:00 ET (11:00 GMT), the Dow Futures contract was down just 15 points, or less than 0.1%, S&P 500 Futures traded 10 points, or 0.3%, higher and Nasdaq 100 Futures climbed 90 points, or 0.7%.

The main Wall Street indices closed sharply lower Tuesday, falling for the third consecutive session and on course to end the month with losses, as investors fretted that the Federal Reserve will remain aggressive in attempting to rein in inflation, at the likely expense of economic growth.

The Dow Jones Industrial Average dropped over 300 points, or 1%, while the S&P 500 and the Nasdaq Composite both closed 1.1% lower.

This bout of stock market weakness followed hawkish comments from Fed chief Jerome Powell at Friday’s Jackson Hole symposium, and central bank officials have been keen to continue spreading the message that further tightening is necessary.

The Fed has already raised its benchmark rate by 225 basis points since March, and is expected to hike by 75 basis points for the third successive meeting in September.

The economic data slate is largely empty Wednesday, with only the new ADP private payrolls survey to consider, but the difficulties the world’s major central banks are having with inflation was illustrated earlier in the session by Eurozone inflation rising to a new record level in August.

The bloc's closely-watched consumer price index jumped to an all-time peak of 9.1% on an annual basis, topping the previous high of 8.9% registered in July.

It's a light calendar for earnings, but quarterly results from drinks giant Brown Forman (NYSE:BFb) and cybersecurity firm Okta (NASDAQ:OKTA) will be in the spotlight.

Elsewhere, HP (NYSE:HPQ) stock fell 6% premarket after the laptop maker’s third-quarter sales disappointed, while Chewy (NYSE:CHWY) stock slumped over 11% as spending on pets took a hit from soaring inflation.

Bed Bath & Beyond (NASDAQ:BBBY) stock fell 15% after the troubled retailer said in a filing it would sell shares of an undisclosed amount.

Oil prices slumped Wednesday, heading for a third straight monthly drop, the longest losing run in more than two years, largely on prospects for slower global growth as central banks aggressively lift interest rates.

The Energy Information Administration releases its latest reading on U.S. oil inventories later in the session, a day after a hefty sell-off as investors feared a global economic slowdown will hit demand.

The American Petroleum Institute, an industry body, reported U.S. crude inventories unexpectedly rose by 593,000 barrels last week.

By 07:00 ET (11:00 GMT), U.S. crude futures traded 2.6% lower at $89.30 a barrel, while the Brent contract fell 2.6% to $95.31. Both benchmarks slumped around 5% on Tuesday, the steepest decline in around a month.

Additionally, gold futures fell 0.8% to $1,722.95/oz, while EUR/USD traded 0.3% lower at 0.9978.