US Stocks Could Head For Recovery Today After Inflation-Report-Induced Bloodbath, Futures Trading Suggests — Nikola, JNJ, SoFi In Focus

Zinger Key Points
  • Tuesday's plunge could pull in some bargain hunters in the market.
  • Producer price inflation report could set the tempo, going into the trading session.

U.S. stocks could pick up the shreds after the ravages inflicted by an inflation reading that came in more than expected. The major U.S. index futures are pointing to a higher open on Wednesday. On Tuesday, the major U.S. averages recorded their worst single-day declines since the middle of June 2020 amid the COVID-19 pandemic.

The sell-off, though across-the-board, was more severe among IT and communications services stocks.

“Markets hate rate hikes.. and, based on today’s CPI numbers, there is no relief in sight,” Jamie Cox, Managing Partner, Harris Financial Group said.

“Even though recent data suggests inflation is coming the Fed’s way, it’s not yet showing up in the data series,” he added.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite -5.16%   11.633.57
S&P 500 Index -4.32%   3,932.69
Dow Industrials -3.94%   31,104.97

Here’s a peek into index futures trading:

U.S. Futures' Performance On Wednesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.50%  
S&P 500 Futures +0.39%  
Dow Futures +0.28%  
R2K Futures +0.06%  

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY was rising 0.43% to $394.80 and the Invesco QQQ TrustQQQ was moving up 0.44% to $295, according to Benzinga Pro data.

On the economic front, the Bureau of Labor Statistics will release the producer price inflation report for August at 8:30 a.m. EDT. The year-over-year rates of the headline and core readings were at 7.6% and 9.8%, respectively, in July. Since producer prices are considered a leading indicator of how prices would shape up at the retail level, a softer-than-expected reading could help the market bounce significantly.

The Energy Information Administration’s crude oil inventories report for the week ended Sept. 9 is due at 10:30 a.m. EDT.

The Mortgage Bankers Association’s weekly mortgage application data is due ahead of the market open.

Stock In Focus

  • Nikola Corporation NKLA is advancing after BTIG upgraded the stock, citing accelerating hydrogen adoption.
  • Johnson & Johnson JNJ was seen higher after the company announced a $5 billion stock buyback program.
  • SoFi Technologies, Inc. SOFI is also climbing in reaction to a positive analyst action.

Commodity, Global Markets 

Crude oil futures are bouncing back after the moderate decline seen on Tuesday amid the release of the inflation data. A barrel of WTI crude oil is currently trading at $87.72, up 0.47%.

The major Asian markets closed firmly in the red, taking cues from Wall Street’s plunge overnight. The Japanese market was also reacting to a weak domestic industrial production report for July.

European stocks are seen extending their losses, with U.K. inflation data adding to the negativity seen in the markets.

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Posted In: NewsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading IdeasInflationNasdaq futuresS&P 500 futures
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