Wall Street set to slide on inflation worries

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  • Energy stocks rise on rising oil prices
  • Southwest falls on cancellation of multiple flights
  • Big banks set to start reporting from Wednesday
  • Futures down: Dow 0.05%, S&P 0.22%, Nasdaq 0.49%
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October 11 (Businesshala) – US stock indexes were set to open lower on Monday as rising commodity prices added to inflation concerns, with Wall Street banks set to post third-quarter earnings calls this weekend. The weather dampened the hopes.

Rising raw material costs, labor shortages and other supply chain constraints have added to concerns of higher prices affecting corporate profits.

US oil rose nearly 3% and touched a seven-year high as major economies hit by the energy crisis showed no respite.

But it lifted shares of Chevron Corp (CVX.N), Exxon Mobil Corp (XOM.N) and APA Corp (APA.O) between 1.5% and 3.2% in premarket trading.

Mega-caps Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O) fell between 0.4% and 0.7%.

“While the recent rise in prices undoubtedly poses significant risks to growth, rising natural gas prices are expected to drive sharp increases in both energy and food expenditures,” Joshua Mahoney, senior market analyst at IG, wrote in a client note.

“Inflation looks like it will be here for some time.”

At 8:40 a.m. ET, the Dow E-Minis were down 17 points, or 0.05%, the S&P 500 E-Minis were down 9.75 points, or 0.22%, and the Nasdaq 100 E-Minis were down 73.25 points, or 0.49%.

Earnings season will begin this week with JPMorgan Chase & Company (JPM.N) reporting on Wednesday, followed by Bank of America Corp (BAC.N), Morgan Stanley (MS.N) and Citigroup Inc (CN). on Thursday and Goldman Sachs Group Inc. (GS.N) on Friday.

“There is panic before earnings… investors are concerned about what companies are going to say about their future earnings forecast,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“Any earnings loss would probably be due to supply chain disruptions, not being able to get enough products on the shelf, or products sitting in the wrong places or ports.”

According to IBES data from Refinitiv, analysts see a 29.6% year-over-year increase in profits for S&P 500 companies in the third quarter, down from 96.3% growth in the second quarter.

All of Wall Street’s main indexes ended last week with gains, but investors still expect the Federal Reserve to begin reducing asset purchases later this year.

After last week’s data showed weaker-than-expected job growth in September, investors are now looking to inflation and retail sales numbers this week, as well as minutes from the Fed’s last meeting that may confirm November’s tapering off. was discussed.

Southwest Airlines Company (LUV.N) slipped 2.9% on a report that it canceled at least 30% of its scheduled flights on Sunday.

US bond markets were closed on Monday on account of Columbus Day.

Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Arun Koyur

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