LIVE Markets-S&P 500 futures add to gains, yields decline after CPI
SPY•Futures and yields move after CPI
U.S. equity index futures have added to gains on Friday after largely in-line consumer inflation data prompted investors to raise their expectations for future Federal Reserve tightening.
E-mini S&P 500 futures ESc1 are now up just over 1% vs. a gain of about 0.7% just before the numbers came out.
The August headline CPI matched expectations, while core CPI rose 0.3% on the month, slightly above economists' 0.2% forecast.
According to the CME's FedWatch Tool, the probability that the Fed delivers a 25-basis point rate hike at its September 15 to 16 FOMC meeting is now 90% vs. 69% just before the data was released. The chance the Fed sits on its hands and leaves its current target rate of 3.50% to 3.75% unchanged is now around 10% vs. 31%.
Interest rate probabilities based on Fed funds futures are now suggesting the implied target rate will be 52.6 bps higher through December 2026 vs. 46.4 bps higher just before the data came out.
The U.S. 10-Year Treasury Yield is now around 4.91%. It was around 4.94% just before the data came out. The yield ended Thursday at 4.944%.
Premarket moves across sectors and assets
Most S&P 500 .SPX sector SPDR ETFs are higher in premarket trading. Tech XLK.P, up around 1.2%, is the strongest group. Energy XLE.P, off around 0.6%, is lower.
The SPDR S&P Regional Banking ETF KRE.P is up about 0.7%. The Invesco PHLX Semiconductor ETF SOXQ.O is rallying about 2%.
Regarding the inflation data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:
