US stocks fall sharply on inflation concerns; Fed speakers, Salesforce in focus

Investing.com– U.S. stocks fell Wednesday on growing concerns upcoming inflation data will lead to the Federal Reserve delaying interest rate cuts. 

At 09:40 ET (13:40 GMT), fell 385 points, or 1%, fell 40 points, or 0.8%, and dropped 125 points, or 0.7%. 

Rate jitters mount amid hawkish Fedspeak, PCE watch

Broader U.S. stocks were largely subdued in anticipation of key inflation data this week. data, which is the Federal Reserve’s preferred inflation gauge, is due this Friday, and is likely to factor into the central bank’s outlook on interest rates. 

Signs of sticky inflation have led several officials to suggest in recent days that they would like to see more evidence of cooling prices before starting to bring rates down from more than two-decade highs.

Minneapolis Fed President Neel Kashkari warned on Tuesday that the Fed had still not ruled out rate hikes. 

More Fed officials, including and are set to speak before Friday’s reading.

rose slightly more than expected to 2.8% in May, preliminary data harmonised to compare with other European Union countries showed on Wednesday, a sign that price pressures remain present in Europe’s largest economy.

This places the inflation figures from the wider , due on Friday, firmly in focus.

Salesforce due to report earnings 

The quarterly corporate earnings season is gradually drawing to a close, but Salesforce (NYSE:) is still due to report its fiscal first quarter earnings after the bell, with Wall Street likely on the lookout for updates on the business software group’s Data Cloud division.

Elsewhere,  American Airlines (NASDAQ:) sank more than 13% after the carrier cut its second-quarter earnings forecast on a more subdued outlook on travel demand. 

This pulled down broader airline stocks, with Delta Air Lines (NYSE:), United Airlines (NASDAQ:) and Spirit Airlines (NYSE:) all significantly lower.

On the other hand, Dick’s Sporting Goods (NYSE:) stock soared 12% after the retailer raised its full-year guidance after customers spent more on new sneakers and athletic gear at its big-box stores, while trading platform Robinhood (NASDAQ:) rose 1.6% after it unveiled a stock buyback of $1 billion. 

Marathon Oil (NYSE:) stock rose over 10% after ConocoPhillips (NYSE:) announced plans to buy the Houston-based company, in an all-stock deal worth $17.1 billion that would strengthen the company’s shale assets.

Crude gains ahead of US inventory data 

Crude prices rose Wednesday, adding to recent gains on hopes that demand will pick up with the onset of the travel-heavy U.S. summer season. 

By 09:40 ET, the U.S. crude futures traded 0.2% higher at $79.98 per barrel, while the Brent contract climbed 0.2% to $84.08 per barrel.

Both benchmarks gained over 1% on Tuesday.  

The Memorial Day holiday on Monday signaled the start of the peak demand season in the U.S., the world’s biggest oil consumer, helping sentiment in the market.

Upcoming inventory data is expected to further the notion of growing demand, with analysts predicting a 2 million barrel draw in overall inventories. 

Additionally, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, is set to take place online over the weekend, and the cartel is expected to extend its current voluntary output cuts of 2.2 million barrels per day into the second half of the year.

(Ambar Warrick contributed to this article.)