US stock futures fall as sticky inflation weighs ahead of Fed meeting

Investing.com-- U.S. stock index futures fell in evening deals on Thursday, extending mild losses from the session as hotter-than-expected inflation readings put markets on edge before a Federal Reserve meeting next week.

Technology stocks, particularly chipmakers exposed to artificial intelligence, saw steep losses on Thursday as fears of higher-for-longer interest rates spurred heavy profit-taking in the sector. Losses in the sector extended into after hours trading, with market darling NVIDIA Corporation (NASDAQ:NVDA) down 0.6%. 

S&P 500 Futures fell 0.1% to 5,212.75 points, while Nasdaq 100 Futures fell 0.2% to 18,238.0 points by 19:14 ET (23:14 GMT). Dow Jones Futures fell 0.1% to 39,309.0 points.

Sticky PPI, CPI inflation readings put rate fears back in play

Wall Street indexes closed lower on Thursday, as hotter-than-expected producer price index inflation data ramped up concerns over inflation remaining elevated.

The reading came just days after a strong consumer price index print, with the two data points ramping up concerns that the Fed will need to keep rates higher for longer to bring down inflation. 

The inflation readings also came ahead of a Fed meeting next week, and saw markets turn more cautious over any potentially hawkish signals from the central bank.

While the Fed is not expected to raise interest rates further, markets were seen pricing down the potential for an interest rate cut in June, especially after the PPI data. This notion spurred some losses on Wall Street, especially as investors locked-in profits after a record-high run in U.S. stocks.

The S&P 500 fell 0.3% to 5,150.48 points, while the NASDAQ Composite closed 0.3% lower at 16,128.53 points on Thursday. The Dow Jones Industrial Average fell 0.4% to 38,905.66 points.

Energy shines, chipmakers decline

Losses on Wall Street were held back by gains in energy stocks, which tracked a spike in oil prices to near five-month highs. Chevron Corp (NYSE:CVX), Exxon Mobil Corp (NYSE:XOM) and ConocoPhillips (NYSE:COP) rose nearly 2% each in Thursday, and drifted higher in aftermarket trade. 

On the other hand, chipmaking stocks were hit with a swathe of profit-taking as an AI-fueled rally now appeared to be running out of steam. In addition to losses in Nvidia, peer Advanced Micro Devices Inc (NASDAQ:AMD) fell 0.4% in aftermarket trade, while chip designer Arm Holdings (NASDAQ:ARM) lost 0.2%. 

Adobe sinks on weak guidance, Rivian gains on upgrade

Among major after-market movers, Adobe Systems Incorporated (NASDAQ:ADBE) slid 11% after issuing weaker-than-expected second quarter revenue guidance on higher competition and weak demand for its AI offerings.

Electric vehicle maker Rivian Automotive Inc (NASDAQ:RIVN) rose 2.9%, recovering from an 8.7% slide during the session after Piper Sandler upgraded the stock to “overweight” on optimism over its R2 SUV and leaner capital spending plans.