US stocks managed to pare premarket losses on Thursday, but remained under pressure as investor worries persisted following a cooler-than-expected reading on producer prices. The unexpected uptick in consumer prices on Wednesday had initially rattled the markets.
Futures on the Dow Jones Industrial Average and S&P 500 slipped around 0.1%, after both gauges had dropped about 1% in the previous session. The tech-heavy Nasdaq 100 traded around the flatline.
The 10-year Treasury yield traded around 4.57%, slightly up after surging to its highest level since November the day before.
The Producer Price Index in March rose 0.2% from the previous month, lower than economists had forecast. Year-over-year growth of 2.1% was also below estimates, but marked the fastest jump in producer prices in nearly a year.
Stocks had pulled back and bond yields soared after the hotter-than-expected March CPI report, prompting investors to reassess expectations for Federal Reserve policy. The market is now pricing in just two rate cuts in 2024, later in the year than previously anticipated. Some analysts even suggest no cuts or a possible hike, depending on economic data.
In Europe, the European Central Bank held rates steady but signaled rate cuts were on the way.
Rising oil prices also added to the concerns, with worries about a potential attack on Israel by Iran forces. Crude futures remained near six-month highs, with West Texas Intermediate trading below $86 per barrel and Brent above $90.
Investors are now looking to first-quarter corporate results to provide momentum to stocks, as high borrowing costs have not yet slowed earnings. Quarterly updates from major banks, including JPMorgan, are expected to kick off the earnings season on Friday.
Overall, the market remains cautious as investors navigate through economic data and geopolitical tensions, hoping for positive corporate results to drive stocks higher.
