Updated 2 min read
US stock futures turned lower on Wednesday, after another reading on prices pointed to accelerating inflation as investors waited for the Federal Reserve’s latest policy decision.
Dow Jones Industrial Average futures (YM=F) lost 0.4% following a second winning day in a row for Wall Street stocks. Contracts on the S&P 500 (ES=F) and tech-focused Nasdaq 100 (NQ=F) fell 0.3%.
Wholesale inflation accelerated in February, new government data showed, before the effects of the Middle East conflict that has gripped markets this month. US producer prices rose 0.7% month-over-month, more than double what economists expected, while a 3.4% year-over-year increase was also far above estimates.
Markets had been cautiously adjusting to the Iran conflict this week, shifting toward pricing in the spillover rather than reacting to the shock. The killing of another top Iranian official came after Tehran vowed revenge, while a fresh round of rhetoric from President Trump failed to dampen war fears. Amid the hostilities, the market focus stayed firmly on when the Strait of Hormuz might reopen to ease pressure on oil prices — a prospect seen as unlikely without a ceasefire.
Against that backdrop, Brent crude futures (BZ=F) rose to near $105 a barrel, continuing their recent surge after Iran said some of its energy facilities had come under attack. West Texas Intermediate crude futures (CL=F) pared earlier morning losses to trade near $95.
Wall Street is bracing for the Fed’s policy decision later Wednesday, and for what Chair Jerome Powell might say about the potential inflationary impact of high oil prices in his comments. They’ll also digest the central bank’s Summary of Economic Projections, which will shed light on policymakers’ expectations for inflation, the labor market, and the US economy as a whole. Markets broadly expect policymakers to leave rates unchanged in a 3.5% to 3.75% range.
On the corporate front, investors are watching Micron Technology (MU), which is set to report quarterly results after Wednesday’s close. General Mills (GIS) and Macy’s (M) also report on Wednesday.
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US producer prices rose more than twice as fast as expected in February
US producer prices rose more than twice as fast as expected in February, according to data released Wednesday by the Bureau of Labor Statistics.
Prices rose 0.7% in February over the previous month, up from January’s 0.5% and more than double economists’ expectations for an increase of 0.3%.
Excluding the more volatile food and energy costs, producer prices advanced by 0.5% over the previous month, outpacing the 0.3% growth economists had predicted but below the previous month’s gain of 0.8%.
On a year-on-year basis, headline prices rose by 3.4%, above estimates of 3% and the previous month’s 2.9% year-on-year increase. Prices ex-food and energy gained 3.9% year-on-year, hotter than estimates of 3.7% and the previous month’s 3.6%.
“Intermediate” prices for the inputs businesses buy to produce other goods and services underpinned the headline gains, led by energy goods and energy materials, which rose 5.5% and 6% over the previous month, respectively.
The Bureau of Labor Statistics noted that “nearly 30 percent of the February rise in the index for processed goods for intermediate demand can be traced to prices for diesel fuel, which increased 13.9 percent.”
Headline final demand prices — the closest producer-side measure to consumer prices — were led by food and energy prices, up 2.4% and 2.3%, respectively, over the previous month.
The index for processed goods for intermediate demand, up 1.6% in February, marked the largest monthly increase since gaining 2% in August 2023, the BLS said. The agency also noted that “sixty percent of the February advance is attributable to a 5.5-percent jump in prices for processed energy goods.”
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Oil prices tick up as conflict remains hot in Middle East, Iraq resumes Kirkuk-Ceyhan exports
Oil prices ticked up in early morning trading on Wednesday as a bevy of headlines and attacks in the Middle East reinforced the risk facing energy markets.
Futures on Brent crude (BZ=F) picked up 3%, or roughly $3 per barrel, in the hours since 12 a.m. ET, while those on West Texas Intermediate (CL=F) gained 2%, or around $1.50.
On Wednesday morning, Iran confirmed the killing of Supreme National Security Council secretary Ali Larijani, a key leader for the regime, but said its leadership remains strong and committed to keeping the Strait of Hormuz closed.
The Iranian regime also said the US and Israel struck the massive offshore South Pars gas field, which Iran shares with Qatar — but Iran did not elaborate past saying the field was hit by airstrikes. Such a development would likely mark the first time since the outbreak of conflict in February that the US and Israel have targeted Iran’s energy infrastructure.
Axios reported around 8 a.m. ET Wednesday morning that the Israeli military had struck a gas facility inside Iran with the approval of the US, citing a senior Israeli official.
At the same time, upward price action is likely muted by the news that Iraq and the semi-autonomous Kurdistan region have reached an agreement to restart Iraqi crude exports through the Kirkuk-Ceyhan pipeline to the Turkish Mediterranean port of Ceyhan. However, the pipeline is only expected to have a capacity of roughly 250,000 barrels per day.
In the physical market, spot prices for Dubai and Oman oil grades are trading around $158 per barrel, or roughly $55 above the benchmark Brent futures contract, according to Bloomberg data, suggesting that the futures market could be significantly lagging reality.
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Premarket trending tickers: Lumentum, Coherent Corp, Boston Beer, and Micron
Lumentum (LITE) and Coherent Corp (COHR) stocks rose 7% and 6% before the bell on Wednesday as investors weighed the latest comments from Nvidia (NVDA) about the role of optical networking. Lumentum, which is the market leader and manufacturer of optical and photonic products, saw its stock price swing on Tuesday after Nvidia said it would use both copper and optical networking during its GTC conference.
Boston Beer’s (SAM) stock fell 2% during premarket hours today. The beer company announced on Monday it will repurchase up to $25 million of its stock through a 10b5-1 plan.
Micron (MU) stock rose 2% before the bell on Tuesday. The digital memory and storage provider announced plans to build a second chip manufacturing facility in Taiwan on Monday and will report its earnings after the close today.
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Macy’s earnings beats Wall Street’s low expectations, gives conservative outlook
Macy’s (M) posted better-than-expected fourth quarter earnings results as the department store chain heads into the third year of its turnaround strategy, called Bold New Chapter.
Adjusted earnings per share for the holiday quarter came in at $1.84, above the $1.54 the Street estimated, according to Bloomberg. Revenue came in at $7.6 billion, just above the $7.5 billion the Street was looking for.
The stock rose nearly 7% in premarket trading
Overall, same-store sales increased 1.8%, compared to 0.12% decline the Street forecast. Comparable sales grew by 2% for stores that Macy’s plans to keep open — those it invested in with new merchandise and more staff.
Same-store sales for its luxury business, Bloomingdale’s, grew nearly 10% during the quarter, which CEO Tony Spring said “underscores its ability to elevate the customer experience and capture demand across premium contemporary to luxury businesses” in the release. Wall Street analysts only expected a 2.5% pop.
Spring added, “At Macy’s, we are offering more relevant brands, stronger storytelling and investing in our colleagues so we can better serve the customer … looking to 2026 and beyond, we are ready to build on our progress.”
The company beat all key metrics, including earnings, revenue, and same-store sales growth, for its fiscal 2025 results.
For the upcoming fiscal year, it expects adjusted earnings to be in the range of $1.90 to $2.10, below the $2.21 the Street expected. That’s alongside revenue of $21.4 billion to $21.65 billion, which was above Wall Street’s predicted outlook of $21.1 billion.
Meanwhile, same-store sales are expected to range from a 0.5% decline to a 0.5% increase. The Street was looking for a 0.5% increase for this year.
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Hormuz reopening looks unlikely without a truce in Iran war
From Bloomberg:
US President Donald Trump is desperate to reopen the Strait of Hormuz to ease a growing global energy crisis. He won’t achieve that easily without a ceasefire in the war on Iran.
… Trump has been pressing allies to send warships to help reopen the strait, proposing a multinational naval effort to escort commercial ships.
European and Asian partners are reluctant, with governments from Berlin to Tokyo questioning whether a handful of ships would make any difference against Iran’s ability to threaten vessels. Officials say additional navies would add little beyond the substantial US presence already in the region — and still fall far short of what’s needed to meaningfully unblock the strait.
“It could take several weeks to secure the Strait of Hormuz,” said Bob McNally, president of Rapidan Energy Group and a former White House official. “Until we’ve neutralized Iran’s layered, asymmetric capabilities — mines, fast attack craft, submarines and drones — we won’t want to put commercial or even escort ships through.”
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NFE stock rises after announcing debt deal
New Fortress Energy (NFE) shares jumped 10% before the bell on Wednesday after announcing a massive debt restructuring deal. The plan cuts their debt from $5.7 billion down to $527.5 million and splits the company into two.
MT Newswires reports:
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Gold steady near $5,000 as investors weigh Fed rate-cut path
Gold futures traded near $5,000 an ounce on Wednesday as investors weighed the Federal Reserve’s rate-cut path against inflationary risks from the war in the Middle East.
Bloomberg News reports:
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Nvidia green lit for H200 chip to ship to China
Reuters reports:
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Oil holds gain as Iranian security chief confirmed killed
Bloomberg reports:
