Stock futures settled after major averages suffered their worst day since June 2020

Stock futures were little changed on Wednesday after another heated inflation reading sent key averages down to their worst day since June 2020, and dampened investor expectations for a less hawkish Federal Reserve.

Futures related to the Dow Jones Industrial Average rose 12 points, or less than 0.1%. S&P 500 futures rose 0.1%, and Nasdaq 100 futures rose 0.1%.

The Dow Jones fell more than 1,200 points on Tuesday, or nearly 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite Index is down 5.2%.

Then came the market moves The August CPI report showed headline inflation It rose 0.1% m/m despite lower gas prices.

The heated inflation report has left questions about whether stocks will return to their June lows or fall further. It also raised some concerns that the Federal Reserve might do so Possibly higher height From 75 basis points are priced in the markets.

“It surprised the market,” said Quincy Crosby of LBL Financial. “The market was at least expecting that we had stabilized – we may not have moved lower but certainly not climbed higher. The wrong direction and the worry, of course, has always translated into what this means for the Fed.”

All 30 Dow Jones stocks and Standard & Poor’s 500 sectors ended the session lower, sending telecom services down. The sector fell 5.6% and ended its worst day since February, weighed down by major tech stocks such as Netflix and Meta Platforms, which fell 7.8% and 9.4%, respectively.

A reading of the Producer Price Index is due on Wednesday morning and could provide more clues about the state of inflation ahead of the Federal Reserve’s rate hike meeting next week.