US stocks face weekly losses as investors await key inflation data

US stocks face weekly losses as investors await key inflation data

New York, Sep 11: US stock markets remained under pressure on Friday as investors turned cautious ahead of key inflation data that could influence the Federal Reserve’s interest-rate decision next week.

The Dow Jones Industrial Average, S&P 500 and Nasdaq were all heading for weekly declines after the major indexes fell for a fourth consecutive session on Thursday. The latest weakness has been driven by rising oil prices, higher Treasury yields and renewed concerns over inflation.

US stock futures showed some recovery in early trading, with Dow, S&P 500 and Nasdaq-100 futures trading modestly higher. However, investors remained cautious as they awaited the August Consumer Price Index (CPI) report, which is expected to provide an important signal for the Federal Reserve’s next policy move.

The inflation report is particularly important because it is the final major inflation reading available to policymakers before the Fed’s upcoming meeting. A stronger-than-expected reading could increase expectations of another interest-rate hike, while softer inflation could ease concerns about tighter monetary policy.

Oil prices have added to the market’s concerns. Brent crude recently climbed above $100 a barrel amid continuing geopolitical tensions, increasing the risk that higher energy costs could keep inflation elevated. The rise in oil prices has also contributed to higher Treasury yields and greater uncertainty in financial markets.

The US 10-year Treasury yield recently approached 5 per cent, reflecting growing concerns about inflation and the possibility of higher interest rates. Higher bond yields can make equities less attractive and increase borrowing costs for companies and consumers.

Technology and growth stocks remain particularly sensitive to changes in interest-rate expectations because higher borrowing costs can affect company valuations and future investment plans. At the same time, strong demand for cloud computing and artificial intelligence infrastructure continues to support parts of the technology sector.

For investors, the combination of expensive oil, elevated bond yields and uncertainty over the Fed’s next move has created a more cautious trading environment. The S&P 500 had already fallen nearly 3 per cent from its August record close after four consecutive sessions of losses, although it remained in positive territory for the year.

The upcoming inflation data could therefore set the tone for Wall Street in the near term. A cooler inflation reading may provide some relief to equities by reducing expectations of further monetary tightening, while a stronger reading could increase pressure on stocks and keep investors focused on the outlook for interest rates.

With global markets also closely watching energy prices and geopolitical developments, investors are expected to remain cautious and closely track economic data for further direction.