By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Thursday with investors digesting roaring inflation as well as disappointing earnings from banking giant JPMorgan.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 390 points or 1.3%, S&P 500 Futures traded 48 points or 1.3% lower, and Nasdaq 100 Futures dropped 95 points, or 0.8%.
The main indices on Wall Street closed lower Wednesday after consumer inflation data showed prices rose the most in 41 years in June, with the 9.1% jump in prices over 12 months more than expected.
This could embolden the Fed to act more aggressively when it holds its next two-day meeting later this month, attempting to curb these price rises even at the risk of sending the world’s largest economy into recession.
It raised rates a 0.75-percentage-point in June and was widely seen heading in that direction again before the CPI release. But now the possibility of a 1% rate hike looms large, especially after Atlanta Federal Reserve President Raphael Bostic said "everything is in play."
Bank of America economists forecast a “mild recession this year” in the U.S., expecting fourth quarter gross domestic product to decline 1.4% from a year earlier, with services spending slowing and hot inflation spurring consumers to pull back.
Economic data due Thursday include the weekly jobless claims and the June producer price index report, both of which will provide information about the health of the economy.
In the corporate sector, JPMorgan Chase (NYSE:JPM), the largest U.S. bank by assets, reported a 28% fall in second quarter profit as the lender set aside more money to cover potential losses in the face of growing risks of a recession. Rival Morgan Stanley (NYSE:MS) is also scheduled to release its quarterly earnings before the bell.
Oil prices fell Thursday, with the red-hot inflation numbers and U.S. government data showing the largest weekly fuel stockpiles build since January weighing.
Wednesday’s U.S. crude supply data from the U.S. Energy Information Administration showed a build of 3.254 million barrels for the week ended July 8, bolstered by another big release from strategic reserves.
Oil prices have tumbled in the past two weeks on recession concerns, falling through $100 a barrel on Tuesday for the first time since April.
By 7 AM ET, U.S. crude futures traded 2.3% lower at $94.09 a barrel, while the Brent contract fell 1.9% to $97.70.
Additionally, gold futures fell 1.4% to $1,711.35/oz, while EUR/USD traded 0.4% lower at 1.0015.