S&P 500 Futures drop for third consecutive day amid pre-US CPI caution

  • S&P 500 Futures stays depressed near monthly low, flashed the previous day.
  • Wall Street kept the red despite upbeat US Treasury yields.
  • Israel-Palestine tussle, mixed covid vaccine updates add to the risk-off mood.

S&P 500 Futures take offers around 4,135, down 0.25% intraday, during the early Wednesday. The risk barometer dropped to the lowest since early April the previous day as market sentiment worsened ahead of the key US data.

The risk-off mood gets support from the escalating geopolitical tensions in the Middle East as well as mixed updates concerning the coronavirus (COVID-19) vaccines and a light calendar.

The United Nations (UN) pushed for peace at Gaza strip but the tussle among the old enemies continues afterward. On the other hand, Bloomberg terms China’s sinovac covid vaccine as “effective in real-world study” whereas the US Centers for Disease Control and Prevention (CDC) found 23 blood clotting issues linked to the Johnson & Johnson jabbing.

An absence of the key data/events in Asia becomes an extra reason for the market players to extend the previously sour sentiment.

It’s worth mentioning that the Wall Street benchmarks flashed another day in the red on Tuesday. The Dow Jones Industrial Average (DJIA) posted the heaviest drop in seven weeks even as Nasdaq reversed most of the day’s losses after technology shares took a U-turn.

Read: Wall Street Close: Dow drops the most in seven weeks to end the volatile day

Shares in Asia-Pacific copy the moves of S&P 500 Futures while the US 10-year Treasury yields struggle for a clear direction around 1.62% after rising two basis points (bps) the previous day.

Although the economic calendar turns active during the European session, investors are less likely to behave to the ‘normal’ data reading, which matches the market consensus, ahead of the key US inflation figures for April, expected 3.6% YoY versus 2.6% prior. Herein, any hints that the latest run-up in prices could be temporary should buoy the sentiment.

Read: US Consumer Price Index April Preview: The two base effects of inflation

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