Inflation data ahead; Snap, Nvidia drop in premarket after results
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U.S. stock benchmarks were setting up for more losses Friday, with the S&P 500 facing its worst weekly performance since November, as U.S.-North Korea tensions exact a toll on investor sentiment.
Investors will get an update on consumer price inflation, watched for its influence on the Federal Reserve's interest-rate thinking, while shares of Snap Inc. and Nvidia Corp. may draw attention after their earnings releases late Thursday.
S&P 500 index futures slipped 5.10. points, or 0.1%, to 2,434.50, while Dow Jones Industrial Average futures fell 16 points to 21,820. Nasdaq-100 futures shed 13.75 points, or 0.2%, to 5,776.
The indicated U.S. market moves reflect a selloff across global stock markets Friday. The Stoxx Europe 600 benchmark was down 1.1% (http://www.marketwatch.com/story/european-stocks-face-worst-week-in-9-months-on-us-north-korea-tensions-2017-08-11), while Hong Kong's Hang Seng led the Asian losses with a drop of 2%.
On Thursday, the three major U.S. indexes logged their worst performances since mid-May (http://www.marketwatch.com/story/us-stocks-set-up-for-another-day-of-losses-as-north-korean-tensions-simmer-2017-08-10) in a session dogged by geopolitical concerns. Late in the session, U.S. President Donald Trump said perhaps his threat to unleash "fire and fury" on North Korea "maybe wasn't tough enough." (http://www.marketwatch.com/story/trump-today-president-tweets-get-back-to-work-at-senate-majority-leader-mcconnell-2017-08-10)
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The Dow slumped 204.69 points, or 0.9%, to 21,844.01, while the S&P 500 dropped 1.5% to finish at 2,438.21. The Nasdaq Composite took an even bigger hit, closing down 2.1% at 6,216.87.
Wall Street's so-called "fear gauge," the CBOE Volatility Index , meanwhile, hit the highest levels since Election Day on Friday (http://www.marketwatch.com/story/wall-streets-fear-gauge-on-course-for-biggest-weekly-surge-in-2-years-2017-08-11), after a spike on Thursday.
Opinion: What to do with stocks if the U.S. and North Korea go to war (http://www.marketwatch.com/story/what-to-do-with-stocks-if-the-us-and-north-korea-go-to-war-2017-08-10)
"There is a rhetorical war between the two nations, and traders (as are most human beings) are nervous," said Chris Weston, chief market strategist at IG, in a note to clients. "So why buy risk assets (such as equities or credit) when the thematic at hand isn't going to resolve itself in the immediate short-term?"
An editorial in China's state-run Global Times (http://www.globaltimes.cn/content/1060791.shtml), published late Thursday local time, added to the pressure on Asian markets.
Titled "Reckless game over the Korean Peninsula runs risk of real war," the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S. is the first mover.
"If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so," the editorial's authors said.
Wall Street's so-called "fear gauge"
Damage for the week: The days of verbal sparring between Washington and Pyongyang looks set to bruise weekly performances for the major U.S. indexes. With one session left to go, the S&P 500 was headed for a weekly drop of around 1.6%, which would be its biggest since a fall of 1.9% for the week ended Nov. 4, 2016.
The Nasdaq Composite, meanwhile, was facing its worst week since the one ended Dec. 2, which logged a loss of just over 2%. The DJIA was poised for a fall of 1.1%, making for its worst week since a 1.5% drop in the one ended March 24.
Away from geopolitics, Graham Bishop, investment director at Heartwood Investment Management, said price action overall has been muted when companies have beat estimates in the latest reporting period, but then "altogether painful" when they miss.
"U.S. tech is a case in point. This may suggest much is in the price, and therefore risk appetite is taking its own summer holiday," he said in a note to clients.
Data on tap: The Labor Department will release July data on consumer-price inflation at 8:30 a.m. Eastern Time, alongside core CPI. Economists polled by MarketWatch are forecasting a 0.2% monthly rise for both measures, after flat reading the prior month.
Read:Fed's Dudley says 2% inflation target will remain elusive even if price pressures pick up (http://www.marketwatch.com/story/feds-dudley-says-2-inflation-target-will-remain-illusive-even-if-price-pressures-pick-up-2017-08-10)
"Taken in isolation, a strong CPI print would go a long way toward making another Fed rate hike in 2017 appear more likely," said Ilya Spivak, senior currency strategist at DailyFX.
Such an outcome would normally boost the U.S. dollar, Spivak said in a note. Early Friday, the ICE Dollar Index was up just 0.04% to 93.437.
On the Fed speaker list, Dallas Fed President Rob Kaplan is scheduled to appear in a question-and-answer session at the University of Texas Arlington, in Arlington, Virginia, at 9:40 a.m. Eastern.
Later, Minneapolis Fed President Neel Kashkari is expected to speak in a question-and-answer session at the Independent Community Bankers of Minnesota Annual Convention at 11:30 a.m. Eastern
Stock movers: Shares of Snapchat parent Snap Inc.(SNAP) slid 14% in premarket trading. Snap's earnings missed forecasts (http://www.marketwatch.com/story/snap-ceos-promise-cant-overcome-declining-ad-rates-stock-heads-toward-new-lows-after-earnings-2017-08-10) Thursday, and the social-messaging company disclosed that average ad prices fell in the second quarter.
Nvidia Corp.(NVDA) shares fell 7%, even after the chip maker posted upbeat earnings late Thursday. Some say expectations for its server-chip business were just too high (http://www.marketwatch.com/story/nvidia-stock-could-pause-as-server-growth-slows-down-2017-08-10).
Nordstrom Inc.(JWN) shares rose 1.6% after the retailer late Thursday posted earnings that beat expectations (http://www.marketwatch.com/story/nordstrom-shares-rise-after-retailer-tops-views-sales-rise-2017-08-10), along with a sales rise.
J.C. Penney Co.(JCP) is on tap to report quarterly earnings ahead of the market open.
Other markets: Asian markets had another tough day (http://www.marketwatch.com/story/asian-markets-extend-selloff-in-face-of-north-korean-crisis-2017-08-10), while the Hong Kong Hang Seng Index and the South Korea Kospi dropped 2.5% and 3.2%, respectively, for the week. European stocks were facing the worst week in nine months (http://www.marketwatch.com/story/european-stocks-face-worst-week-in-9-months-on-us-north-korea-tensions-2017-08-11) on U.S.-North Korea tensions.
Oil prices were under pressure (http://www.marketwatch.com/story/oil-prices-head-lower-as-global-tensions-continue-unabated-2017-08-11), with prices ticking lower after the International Energy Agency said oil supply rose for a third month as compliance with an OPEC output deal faltered.
Gold prices were modestly up, and headed for a strong weekly gain (http://www.marketwatch.com/story/gold-heads-for-strong-weekly-gain-as-stock-market-exit-persists-2017-08-11).
(END) Dow Jones Newswires
August 11, 2017 07:40 ET (11:40 GMT)