By Peter Nurse
Investing.com - U.S. stocks are seen opening lower Wednesday, continuing the recent selloff ahead of the eagerly-awaited April inflation release.
The blue-chip Dow Jones Industrial Average closed sharply lower Tuesday, dropping almost 500 points, or 1.4%, its worst day since February, while the S&P 500 slipped 0.9% and the Nasdaq Composite ended the day as the relative outperformer, closing down just 0.1%
Investors have started fretting about a potential sharp rise in prices, and what that means in terms of a speedy economic recovery and the Federal Reserve’s ultra-easy monetary policies.
St. Louis Federal Reserve President James Bullard on Tuesday joined the chorus of Fed speakers that have been at pains to state that it’s still not time to change the central bank’s accommodative stance.
However, the latest consumer price data , due at 8:30 AM ET (1230 GMT), could well raise the pressure on the policy makers. The year-over-year reading will be distorted by base effects from last year's pandemic-induced plunge in energy prices, but consensus is for a 3.6% gain, which would be its highest since 2008.
Meanwhile, U.S. national average retail gasoline prices have risen above $3 a gallon for the first time since 2014, after a cyberattack shut operations at Colonial Pipeline, the main supply link for the East Coast.
Colonial has only restarted a small section in the five days since the shutdown, and doesn’t expect substantial restoration of service before the weekend.
Oil prices pushed higher Wednesday as a drop in U.S. crude stockpiles reassured traders that the recovery in demand remains on track.
In the corporate sector, Amazon (NASDAQ: AMZN ) won its fight against an EU order to pay about 250 million euros ($303 million) in back taxes to Luxembourg, while Electronic Arts' (NASDAQ: EA ) outlook for the full year turned out stronger than expectations and Carnival (NYSE: CUK ) pushed back almost all cruise sailings to at least the end of July.
Pfizer (NYSE: PFE ), and its partner BioNTech (NASDAQ: BNTX ), could also be in focus as the U.S. Centers for Disease Control and Prevention will meet later Wednesday to discuss recommendations for the use of the drugmaker’s Covid-19 vaccine in children aged 12 to 15.
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