Stock futures pointed lower on Wednesday, indicating Wall Street was bracing for a second day of declines, as the fear of rising inflation forced the Dow to its worst one-day decline since February, and amplified new concerns about the rebound from COVID-19.
With a weekend cyber-attack sharply driving up the cost of gas nationwide — while sparking shortages — investors are growing increasingly restive over inflation. Mounting signs of supply shortages in the face of surging demand threatening to spur a rapid rise in prices.
Those fears crystallized on Wednesday, after the government reported that headline consumer prices surged by a faster than expected 4.2% last month. Excluding food and energy, prices jumped 0.9 percent in April (SA) and are up 3.0 percent over the year.
The jitters have surfaced as the U.S. economic recovery — hammered by the COVID-19 pandemic — appears to be quickening. A report from the Labor Department on Tuesday showed job openings reached a record high in March, and a separate survey showed a record proportion of small business owners reported job postings that could not be filled last month.
A system-wide disruption following a cyberattack on a key energy pipeline operator has sent gasoline prices higher, accelerating an already upward-moving trend in energy prices as demand for travel and fuel resurges coming out of the COVID-19 pandemic. The tableau of a faster economy and soaring prices complicates the Federal Reserve's policy of allowing the economy to run hot — and Wall Street's willingness to take the central bank at its word.