Futures Pointing To Continued Weakness On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to see further downside following the steep drop seen in the previous session.

Continued weakness among technology stocks is likely to weigh on Wall Street, as reflected by the 1.2 percent slump by the tech-heavy Nasdaq 100 futures.

The downward momentum for tech stocks comes amid renewed concerns about the outlook for the artificial intelligence trade.

“Tech investors are getting uncomfortable with the amount of debt being used to fund the AI build-out,” said Dan Coatsworth, head of markets at AJ Bell. “There is a growing fear that big names in the tech space are running too fast, and they’re primed to trip up.”

He added, “Reports about Anthropic’s third quarter revenue suggest it isn’t growing as fast as expected, which added to fears that the AI euphoria might be hard to sustain.”

Negative sentiment may also be generated in reaction to a Labor Department report showing producer prices in the U.S. shot up by much more than expected in the month of September.

The Labor Department said its producer price index for final demand jumped by 1.3 in September after rising by an upwardly revised 0.5 percent in August.

Economists had expected producer prices to climb by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.

The report also said the annual rate of growth by producer prices surged to 6.3 percent in September from an upwardly revised 5.6 percent in August.

The annual rate of growth was expected to hold steady at the 5.4 percent originally reported for the previous month.

Following yesterday’s hotter-than-expected consumer price inflation report, the data is likely to add to concerns about the outlook for interest rates.

After ending Tuesday’s choppy trading day modestly lower, stocks showed a more significant move to the downside during trading on Wednesday. The tech-heavy Nasdaq saw a particularly steep drop on the day.

The major averages climbed off their worst levels going into the end of the day but still closed in the red. The Nasdaq tumbled 511.51 points or 1.9 percent to 26,692.87 and the S&P 500 slumped 86.51 points or 1.1 percent to 7,7718.94.

The narrower Dow posted a much more modest loss, with the blue chip index edging down 48.62 points or 0.1 percent to 51,621.48.

The weakness on Wall Street came after the Labor Department released its closely watched report on consumer price inflation in the month of September.

While the report showed consumer prices grew in line with estimates, it also showed a bigger than expected increase in core consumer prices, which exclude food and energy prices.

The report said consumer prices climbed by 0.6 percent in September after rising by 0.4 percent in August. The increase in prices matched economist estimates.

The Labor Department also said the annual rate of consumer price growth jumped to 3.7 percent in September from 3.4 percent in August, which was also in line with expectations.

Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.3 percent for the second straight month. Economists had expected core prices to edge up by 0.2 percent.

The annual rate of core consumer price growth accelerated to 2.6 percent in September from 2.4 percent in August, coming in slightly above economist estimates for 2.5 percent growth.

The bigger than expected increase in core prices led to renewed concerns about the outlook for interest rates ahead of the Federal Reserve’s next monetary policy meeting later this month.

A sharp increase by the price of crude oil also weighed on stocks, with U.S. crude oil futures jumping by 1 percent.

The jump in crude oil prices came after a report from the International Energy Agency warned the recent escalation in attacks on regional energy infrastructure and tanker traffic in the Middle East is threatening to derail a recovery in oil supply.

Computer hardware stocks showed a substantial move to the downside over the course of the session, resulting in a 6.3 percent nosedive by the NYSE Arca Computer Hardware Index.

The sharp increase by the price of crude oil also contributed to significant weakness among airline stocks, with the NYSE Arca Airline Index plummeting by 5.1 percent.

Gold, semiconductor and networking stocks also saw considerable weakness on the day, while pharmaceutical and healthcare stocks bucked the downtrend.

Commodity, Currency Markets

Crude oil futures are edging down $0.01 to $95.08 a barrel after jumping $0.95 to $95.09 a barrel on Wednesday. Meanwhile, after slumping $69.40 to $4,107.90 an ounce in the previous session, gold futures are surging $66.90 to $4,174.80 an ounce.

On the currency front, the U.S. dollar is trading at 157.92 yen versus the 158.31 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1201 compared to yesterday’s $1.1156.

Asia

Asian stocks retreated on Thursday, with AI and semiconductor stocks coming under heavy selling pressure on concerns about the sustainability of the artificial intelligence trade.

After U.S. CPI data surprised to the upside, investors awaited the release of U.S. producer price inflation and retail sales data as well as speeches from Fed officials, including Chairman Kevin Warsh, later in the day for additional clues on the Fed’s next move.

San Francisco Fed president Mary Daly signaled Wednesday that the U.S. central bank will likely need to raise short-term interest rates further to address inflation, adding there’s no need to do so at the October 27-28 meeting.

Traders now see a nearly 35 percent chance the Fed will raise borrowing costs at its next meeting later this month, up from the 22 percent probability seen a day earlier, according to CME Group’s FedWatch tool.

The U.S. dollar slipped from an 18-month high, while gold prices rose about 1 percent to $4,140 an ounce after touching a one-week low in the previous session.

Brent crude futures fell nearly 2 percent toward $104 a barrel due to profit taking following a recent rally as reports suggested the Trump administration is considering easing sanctions on so-called shadow fleet vessels in order to reduce record-high global freight rates.

However, supply concerns remain elevated after two commercial vessels were struck by unidentified projectiles while passing through the Strait of Hormuz on October 13 and 14, as reported by the Maritime and Port Authority of Singapore.

Yemen’s Houthis vowed to press on with attacks on airports and oil facilities in Saudi Arabia after hitting the headquarters of the Saudi state-owned oil company Aramco a day earlier.

Elsewhere, Russia accused Ukraine of carrying out drone strikes on two oil refineries, including the 400,000-barrel-per-day Ryazan facility.

“We see no indication that the Ukrainian side is moving towards an energy ceasefire,” Russian Deputy Prime Minister Alexander Novak said.

China’s Shanghai Composite Index tumbled 1.6 percent to 3,707.48, reaching its lowest level in more than a year as a sell-off in artificial intelligence-related supply chain shares intensified.

Hong Kong’s Hang Seng Index dropped 1 percent to 24,062.72, weighed down by tech shares on heighted concerns over further Federal Reserve rate hikes.

Japanese markets plummeted amid concerns over elevated oil prices and high valuations in technology shares. The Nikkei 225 Index plunged 4.9 percent to 64,425.95, while the broader Topix Index settled 2.4 percent lower at 3,999.34.

Among the prominent decliners, Tokyo Electron, SoftBank Group, Kioxia Holdings and Advantest nosedived 8-15 percent.

Seoul stocks plunged on concerns about whether substantial AI investment would generate the expected returns. The Kospi Index plummeted 7.6 percent to 5,554.22, extending losses for a seventh straight session.

Market bellwether Samsung Electronics plunged 9.5 percent and its chip rival SK Hynix nosedived 11 percent. Trading on both of South Korea’s stock markets was halted earlier in the day after the Kospi and Kosdaq fell more than 8 percent.

Australian stocks ended off their day’s lows after unemployment unexpectedly fell in September, helping ease fears of further interest rate rises. The benchmark S&P/ASX 200 Index finished marginally lower at 8,719.70, while the broader All Ordinaries Index slipped 0.3 percent to 8,840.40.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.5 percent to 13,832.80, extending gains from the previous session to reach its highest level since September 30.

Europe

European stocks are mixed on Thursday as oil prices and Eurozone government bond yields fall, tracking an overnight decline in U.S. Treasury yields.

The U.S. dollar retreated from an 18-month high and bond yields eased after San Francisco Fed president Mary Daly signaled Wednesday that there’s no need to raise interest rates at the October 27-28 meeting.

In economic news, French consumer price inflation rose to 3.1 percent in September from 2.4 percent in August due to rising energy and fresh food prices, final data from the statistical office INSEE showed. A similar higher rate was last seen in January 2024.

EU harmonized inflation climbed to 3.4 percent, as initially estimated, from 2.6 percent in the prior month.

Elsewhere, the U.K. economy expanded marginally in August as growth in production was partly offset by the fall in construction, the Office for National Statistics said.

GDP grew 0.1 percent in August from the last month. Although this was weaker than the 0.4 percent growth seen in July, the rate came in contrast to the expected fall of 0.1 percent.

While the German DAX Index is down by 0.3 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.8 percent.

Swedish telecom gear maker Ericsson has moved sharply higher after its third quarter operating profit beat forecasts.

ARYZTA, a Swiss bakery company, has also surged after promoting its interim Chief Executive Officer and incumbent Chairman, Urs Jordi to the role of Chief Executive Officer.

TotalEnergies has also advanced. The French integrated energy company said it expects third-quarter hydrocarbon production to reach 2.45 million to 2.50 million barrels of oil equivalent per day (Mboe/d).

Liquor company Pernod Ricard has also moved to the upside after sales fell less than expected last quarter.

Homeware retailer Dunelm Group has also spiked after reporting a 1.1 percent increase in first-quarter sales.

Big Yellow Group shares have also rallied. The company said it is continuing to explore all options to maximize shareholder value after activist investor Ancora Holdings urged the self-storage giant to explore a strategic review.

Commercial property group British Land has also jumped after the company said it expects strong interim profit and rental income growth.

Meanwhile, Dutch digital mapping specialist TomTom NV has slumped after announcing job cuts and trimming the midpoint of its 2026 revenue guidance.

Packaging firm Mondi has also plummeted as it reported lower underlying EBITDA for the third quarter compared to the same period last year.

Ladbrokes owner Entain has also tumbled after reporting a 2 percent increase in group net gaming revenue for the third quarter of 2026.

U.S. Economic News

Following yesterday’s report on consumer price inflation, the Labor Department released a separate report on Thursday showing producer prices in the U.S. shot up by much more than expected in the month of September.

The Labor Department said its producer price index for final demand jumped by 1.3 in September after rising by an upwardly revised 0.5 percent in August.

Economists had expected producer prices to climb by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.

The report also said the annual rate of growth by producer prices surged to 6.3 percent in September from an upwardly revised 5.6 percent in August.

The annual rate of growth was expected to hold steady at the 5.4 percent originally reported for the previous month.

A separate report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits edged slightly higher in the week ended October 10th.

The Labor Department said initial jobless claims ticked up to 199,000, an increase of 1,000 from the previous week’s revised level of 198,000.

Economists had expected jobless claims to rise to 200,000 from the 197,000 originally reported for the previous week.

The report said the less volatile four-week moving average also inched up to 198,500, an increase of 250 from the previous week’s revised average of 198,250.

Meanwhile, the Commerce Department released a report on Thursday showing retail sales in the U.S. increased by much more than expected in in the month of September.

The report said retail sales climbed by 0.8 percent in September after surging by an upwardly revised 1.3 percent in August.

Economists had expected retail sales to rise by 0.3 percent compared to the 1.2 percent jump originally reported for the previous month.

Excluding an uptick in sales by motor vehicle and parts dealers, retail sales still grew by 0.9 percent in September after shooting up by 1.4 percent in August. Ex-auto sales were expected to climb by 0.5 percent.

A report released by the Federal Reserve Bank of Philadelphia on Thursday showed a steep drop by its reading on regional manufacturing activity in the month of October.

The Philly Fed said its diffusion index for current general activity plunged to 20.9 in October from 37.8 in September, although a positive reading still indicates growth. Economists had expected the index to drop to 30.0.

Looking ahead, the Philly Fed said firms continued to expect overall growth over the next six months, but the diffusion index for future general activity tumbled to 33.0 in October from 52.9 in September.

On the other hand, New York manufacturing activity rose sharply in the month of October, according to a report released by the Federal Reserve Bank of New York on Thursday.

The New York Fed said its general business conditions index surged to 25.5 in October from 7.6 in September, with a positive reading indicating growth. Economists had expected the index to rise to 10.3.

Looking ahead, the New York Fed said firms continued to expect conditions to improve in the months ahead, although the index for future business conditions slid to 21.0 in October from 29.0 in September.

At 10 am ET, the Commerce Department is due to release its report on business inventories in the month of August. Business inventories are expected to rise by 0.4 percent in August after climbing by 0.8 percent in July.

The Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds at 11 am ET.

At 12 pm ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended October 9th.

Cleveland Federal Reserve President Beth Hammack is scheduled to speak on “Leadership and Career Journey” before the Women’s Trading Network Fireside Discussion hosted by Goldman Sachs and Girls Who Code at 4:30 pm ET.

At 11:30 pm ET, Federal Reserve Chairman Kevin Warsh is due to participate in a fireside chat with International Monetary Fund Managing Director Kristalina Georgieva in Bangkok, Thailand.