US open: Stocks drop as CPI confirms market fears

US CPI jumped 4.2% YoY ahead of the 3.6% forecast. Stocks drop as investors anticipate an earlier move by the Fed.

USA (2)

US futures

Dow futures -0.5% at 34070

S&P futures -0.8% at 4120

Nasdaq futures -1.1% at 13190

In Europe

FTSE +0.6% at 6983

Dax +0.2 at 15120

Euro Stoxx  -0.25% at 3934

Learn more about trading indices

Inflation fears hit stocks, tech tumbles

Rising inflation concerns have been stalking the market all week. Today’s CPI data confirmed the markets’ fear that inflation is roaring higher.

US CPI for April came in at 4.2%, well ahead of the 3.6% forecast and up from 2.6% in March. On a monthly basis inflation surged 0.8% versus 0.2% expected and up from 0.6% last month.

Core inflation also shot higher 3% up from 1.6% in March.

The fact that the US Dollar surged and tech look set to take a hit suggests the market it pricing in a sooner move by the Fed to tighten policy. There is still another inflation print due before the Fed trade decision in June, and another jobs report.

However given surging inflation and commodity price the Fed may have to reconsider how transitory it believes inflation will be.

It’s only Wednesday and the tech heavy Nasdaq will want to be drawing a line under this week. After diving -2.5% at the start of the week, the Nadsaq futures are down a further 1.2% today after the inflation data, taking the hardest hit.

FX – USD jumps, GBP shows reliance on upbeat GDP growth

The US Dollar has surged higher after the stronger than forecast inflation numbers.

GBP/USD – trades lower although is showing more resilience than its peers after upbeat UK GDP data. UK GDP Q1 QoQ -1.5% vs -1.7% expected. March GDP +2.1% vs 1.3% expected and up from 0.4% in February suggests that the UK economic recovery is on the right path.

GBP/USD  -0.43% at 1.4087

EUR/USD  -0.61% at 1.2083

Oil extends gains as OPEC  Raises demand outlook

Oil is charging northwards, extending gains for a fourth consecutive session on demand recovery optimism. Expectations are that the global economy will continues along its path to recovery and oil demand will grow.

OPEC & the International Energy Agency upgraded demand outlook has boosted the price whilst investors look ahead to EIA stockpile data.

OPEC’s latest report indicated that its expects a solid recovery in global demand in 2021. Strong economic growth in the US and China should overshadowing the covid crisis in India, the world’s third largest importer of oil.

API data revealed a 2.5 million barrel draw on stocks piles, just after an 8 million barrel draw the week before. Attention will turn to today’s EIA data for confirmation of the fall in inventories.

US crude trades +1.7% at $66.5

Brent trades +1.1% at $69.26

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

15:00 BoE Governor Bailey speaks

15:30 EIA crude oil inventories

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Indices


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.