U.S. Stock Index Futures Decline Amid Inflation Concerns

U.S. stock index futures experienced declines in evening trading on Thursday due to strong producer inflation data and cautious remarks from the Federal Reserve, raising uncertainty regarding the pace of interest rate reductions.

Losses in futures followed a negative session on Wall Street, as a recent risk-on rally began to slow, leading investors to reevaluate expectations for a December rate cut.

Concerns about long-term inflation also heightened amidst the possibility of a second Donald Trump presidency, which many believe could lead to more inflationary policies.

• S&P 500 Futures fell 0.2% to 5,966.25 points
• Nasdaq 100 Futures decreased 0.3% to 20,945.50 points
• Dow Jones Futures dropped 0.1% to 43,853.00 points

Powell Flags Caution Over Rate Cuts

Fed Chair Jerome Powell indicated on Thursday that the strength of the U.S. economy could allow for careful consideration regarding interest rate cuts.

Powell's remarks followed reports indicating that October's producer price index inflation exceeded expectations, reflecting persistent inflation concerns. This preceded a consumer price index report showing similar stickiness in inflation levels.

In light of this data, traders adjusted their expectations for December, reducing the odds of a 25-basis-point rate cut. The CME Fedwatch tool recorded a 51.7% chance of rates remaining unchanged and a 48.3% chance of a cut.

The longer-term outlook for interest rates also faced new uncertainties due to Trump's anticipated protectionist policies, which could sustain inflationary pressures in the upcoming years.

As a result, Wall Street declined from record highs, while the U.S. dollar and Treasury yields rose sharply.

• S&P 500 fell 0.6% to 5,949.17 points
• NASDAQ Composite dropped 0.6% to 19,109.29 points
• Dow Jones Industrial Average decreased 0.5% to 43,750.86 points

After-hours Movers: Applied Materials Sinks, Domino’s Surges

In after-hours trading, notable movers included Applied Materials Inc. (NASDAQ: AMAT), which saw a nearly 6% decline following quarterly earnings that fell short of expectations, with concerns about slowing revenue from China.

Conversely, Domino's Pizza Inc. (NYSE: DPZ) surged over 9% after Berkshire Hathaway (NYSE: BRKa) disclosed it had acquired a stake in the company. Pool Corporation (NASDAQ: POOL) also rose by 5.6% following Berkshire's investment disclosure.