US stock futures fall on pressure from inflation jitters, Fed comments

Investing.com-- U.S. stock index futures fell in evening deals on Wednesday, extending a decline in Wall Street as uncertainty over an upcoming inflation reading and warnings from Federal Reserve officials spurred increased risk aversion.

Investors remained largely fearful that sticky inflation will see the Fed keep interest rates higher for longer. Several Fed officials echoed this notion on Wednesday, and said more work was needed to bring down inflation. 

S&P 500 Futures fell 0.2% to 5,072.50 points, while Nasdaq 100 Futures fell 0.2% to 17,875.00 points by 18:11 ET (23:11 GMT). Dow Jones Futures fell 0.1% to 38,939.0 points. 

Wall Street indexes had closed lower on Wednesday, with tech stocks leading losses as investors locked-in profits after hype over artificial intelligence drove indexes to record highs last week.

But concerns over stretched valuations, particularly in tech, crept into markets this week, keeping U.S. stock benchmarks in a flat-to-low range for most of the week. 

The S&P 500 fell 0.2% to 5,069.76 points, while theNASDAQ Composite fell 0.6% to finish at 15,947.74 points on Wednesday. The Dow Jones Industrial Average fell 0.1% to 38,949.02 points. 

PCE data in focus as Fed officials flag sticky inflation

Markets were now awaiting PCE price index data- which is the Fed’s preferred inflation gauge- due later in the day for more cues on the path of inflation and interest rates.

The reading, which is for January, comes after a hotter-than-expected consumer inflation reading for the same month.

Fed officials kept up their warnings over sticky inflation limiting the prospect of early interest rate cuts. Both New York Fed President John Williams and Atlanta Fed President Raphael Bostic on Wednesday said that more work needed to bring inflation within the bank’s 2% annual target. 

A second reading on fourth quarter GDP data showed that the U.S. economy was also running relatively hot, keeping the outlook for inflation high in the coming months. 

Mixed earnings weigh as Q4 season winds down

A mixed batch of earnings also made for negative trading signals for Wall Street, as the fourth quarter earnings season came to a close.

HP Inc (NYSE:HPQ) fell 3% in aftermarket trade after its quarterly revenue missed estimates, although earnings improved on better margins.

Cloud company Snowflake Inc (NYSE:SNOW) slid 20% after its first quarter product sales guidance missed estimates, amid persistent competition in the cloud computing sector.

C3.ai Inc (NYSE:AI) jumped 13% on consensus-beating quarterly revenue, while Duolingo Inc (NASDAQ:DUOL) surged 21%. 

On the other hand, DoubleVerify Holdings Inc (NYSE:DV) slid 19% on weak annual guidance.