Dow Slides On Inflation Concern, Germany Mulls COVID Lockdown – Stock Markets Live

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U.S. equity futures drifted lower Wednesday, while Treasury yields nudged higher and the dollar extended gains against its global peers, as investors brace for the final full trading session of the Thanksgiving-shortened week.

High value growth stocks are likely to come under pressure again Wednesday, following two consecutive sessions of declines for the Nasdaq, as Treasury yields creep higher amid bets that the Federal Reserve will accelerate its effort to fight inflation with faster bond purchase tapering.

The Fed’s preferred inflation gauge, the PCE Price Index, may offer more clues as to the pace and direction of consumer price pressures heading into the end of the year when the October reading is published at 10:00 am Eastern time. 

However, reports from Germany suggest Europe’s biggest economy could return to a full lockdown in the coming days amid a record surge in COVID infections and a disappointing take-up in the country’s vaccine drive, a decision which could pare risk appetite in both the region, and broader global markets, in the weeks ahead.

On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 115 point opening bell decline while those linked to the S&P 500 are priced for a 15 point move to the downside.

Futures tied to the tech-focused Nasdaq Composite are indicating a 60 point dip as benchmark 10-year Treasury note yields climbed to 1.66% in early New York trading.

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Gap Inc  (GPS) – Get Gap, Inc. (GPS) Report was the most active in pre-market trading, with share plunging more than 20% after the struggling apparel retailer cut its full-year profit forecast following a disappointing third quarter earnings report marred by supply chain disruptions and rising input costs.

Nordstrom  (JWN) – Get Nordstrom, Inc. (JWN) Report, too, shed more than a fifth of its value after the department store retailer warned of holiday supply shortages as rising labor costs and supply chain delays wreak havoc across the sector. 

Tesla  (TSLA) – Get Tesla Inc Report shares edged 1% lower after founder and CEO Elon Musk unveiled another batch of share sales, offloading just over $1 billion in the clean-energy carmaker.

On the other side of the ledger, Deere & Co.  (DE) – Get Deere & Company Report shares jumped 2% after the industrial equipment maker posted stronger-than-expected fourth quarter earnings while noting supply chain pressures will continue to pose a challenge to an otherwise solid profit outlook for its coming fiscal year.

Global oil prices slipped modestly lower in overnight trading amid a jump in the U.S. dollar and questions over demand strength in Europe as markets unwound their initial reaction to yesterday’s decision from President Joe Biden’s to sell crude from the Strategic Petroleum Reserve.

The German lockdown reports, as well as rising COVID infection rates around Europe, are also helping crude prices lower in the Wednesday session, with WTI futures for January delivery marked 2 cents lower at $78.49 per barrel. Brent crude contracts for January, the global benchmark, fell 5 cents to $82.29 per barrel. 

In overseas markets, Europe’s Stoxx 600 gave back earlier gains to trade at a fresh 3 week low of 478.94 points amid both the lockdown concern and a weaker-than-expected reading for German business morale from the closely-tracked Ifo sentiment index.

In Asia, the region-wide MSCI ex-Japan index was marked 0.22% lower on the session, while the Nikkei 225 in Tokyo returned from yesterday’s Labor Day Thanksgiving holiday to close 1.58% lower at 29,302.66 points.