Traders works at the New York Stock Exchange (NYSE) August 3, 2021.
Andrew Kelly | Reuters
U.S. stock futures opened flat on Tuesday night after both the Dow Jones Industrial Average and S&P 500 finished the regular session down, despite a slower-than-expected rise in U.S. inflation.
Dow Jones Industrial Average futures rose 19 points, or 0.06%. S&P 500 and Nasdaq 100 futures climbed 0.09%, respectively.
In regular trading Tuesday, the major averages retreated after snapping a five-day losing streak on Monday. The Dow fell 292.06 points, or 0.8%, to 34,577.57. The S&P 500 lost 0.6% to finish at 4,443.05 and the Nasdaq Composite slipped 0.5% to 15,037.76.
The Labor Department released data before the bell showing a smaller-than-expected rise in U.S. inflation for the month of August. Consumer prices rose 5.3% from a year ago and 0.3% from July. Stripping out food and energy, the consumer price index was up just 0.1% for the month.
Initially, markets rallied but turned back down after the market open as uncertainty about the timing of the Federal Reserve’s tapering of asset purchases settled in.
“The Federal Reserve will probably delay slowing its purchase of Treasury and mortgage-backed securities despite slight indications that the price increase in durable goods is transitory, as illustrated by the reduction in used car prices,” said Dawit Kebede, senior economist at Credit Union National Association. “This is because we are far from maximum employment,” one of the Fed’s two goals of its dual mandate.
While the data was cooler than expected, inflation is still running hot, according to Brad McMillan, chief investment officer for Commonwealth Financial Network.
“We will likely see inflation run hot for at least the rest of the year and quite possibly into 2022,” he said. “But we do see the change in trend, which shows that the change in basis is taking effect and that the economy is healing.”
Stocks tied to the economic recovery edged lower Tuesday. United Airlines fell 2.1% and Bank of America lost 2.6%. General Electric closed 3.9% lower.
Casino stocks took a big hit as the government of Macau looks to increase regulatory scrutiny over casinos and Chinese health authorities reported a Covid-19 outbreak. Las Vegas Sands fell 9.7%, Wynn Resorts dropped 10.8% and MGM resorts lost 3.9%.
Apple shares closed almost 1% lower after the company introduced the iPhone 13 at its annual product unveiling event.
Wednesday is the final day of the SALT Conference in New York City. In terms of economic data, U.S. import and export prices and mortgage applications data are scheduled to be released Wednesday.