Futures Slump As Oil Prices Spike Trigger Inflation Worries

Start Trading

The United States stock index futures took a hit Thursday as surging oil prices kicked off another inflation concern.

Another Crumbling Equity Trading

The equity market was panicking over fears of a possible interest hike. According to the Wednesday stock report, the Federal Reserve’s previous actions have made the market more vulnerable than ever. 

As a result, the spillover effect of the interest rate increase is felt by all sectors. Moreover, the report shows that U.S. labor demand appears to be strong.

Stock growth also fell as the 10-year Treasury yield spiked for the second time.

Other stocks in the red include Twitter Inc (NYSE: TWTR), Microsoft Corp (NASDAQ: MSFT), and Nvidia Corp (NASDAQ: NVDA), which also plunged during the pre-trading session.

Tesla Inc. (NASDAQ: TSLA) also dropped following worries about the potential buyout of Twitter by Elon Musk. This comes after Apollo Global Management Inc. (NYSE: APO) and Sixth Street Partners failed to provide finance for Musk’s $44 billion Twitter acquisition.

Meanwhile, oil prices appear to be inching closer to a three-week high after OPEC-inspired supply cuts. The move coincides with the European Union’s (EU) latest sanction on Russia’s energy. 

The EU has moved to hamper Russia’s energy supply following its latest onslaught on Ukraine by annexing four territories.

Waiting for the Feds

The American labor data shows increasing hiring by private enterprises. The surge in ISM’s services sector employment suggests further interest rate hikes by the Fed.

Interestingly, the money market is betting on an 80% chance of another 75 basis point hike for the fourth time. However, the decision to increase the rate is expected to come up at the next Fed meeting in November.

On Wednesday, the San Francisco Fed’s president, Mary Daly, reiterated the central bank’s drive to curb inflation. The regulator is opting for a more aggressive rate hike to achieve this in the next few weeks.

In another development, the job market records show that 203,000 Americans are scheduled to file for unemployment benefits. Thus, this implies a 10,000 increase from the previous data, which ended on the 30th of September.

Goldman Sachs revealed that the growing fears of a possible recession are forcing corporate leaders to increase their capital spending and job openings. Experts believe more people will file unemployment claims ahead of the holiday season.

Amazon Hints at More Hires

The U.S.-based retail giant Amazon plans to hire an additional 150,000 workers ahead of the holiday period. Accordingly, the new hiring will involve full-time, part-time, and seasonal hires across its outlets in the United States.

In September 2021, Amazon hired the same number of workers to occupy the packing, sorting, and shipping workforce. In some locations, the new hires are eligible for a signup bonus of close to $3,000.

Furthermore, the retail giant has raised its average hourly pay from $18 to $19 to attract and retain workers. The move comes amid a tightening labor market as the holiday season approaches.

Start Trading

Leave a Comment

1 Institute Trade Blog | All Rights Reserved 2022 | Disclaimer | ✉ Contact