© Reuters
Investing.com – U.S. stock futures rose after a negative day on Wall Street, fueled by hotter-than-expected U.S. inflation data that prompted markets to rebalance bets on Federal Reserve interest rate cuts. Lyft (NASDAQ:) shares are experiencing a bumpy ride following an erroneous press release from the ride-hailing group Sony (NYSE:) confirms a plan to list its financial services division.
1. Futures rise
U.S. stock futures edged higher on Wednesday, pointing to a slight rebound on Wall Street after stocks posted their worst day so far this month following stronger-than-expected U.S. inflation readings.
As of 4:59 a.m. ET (09:59 GMT), the contract had gained 21 points, or 0.4%, was up 110 points, or 0.7%, and was up 94 points, or 0.3%.
The major indexes in New York all fell in the previous session, with the benchmark falling 1.4%, the tech-heavy indexes losing 1.8% and the blue-chip indexes falling 1.4%. Traders reacted to data on Tuesday that showed the overall rise in U.S. consumer prices was stronger than economists had predicted in January, pointing to persistent inflationary pressures that further dashed hopes of an early interest rate cut by the Federal Reserve .
Analysts at ING said the release made “uncomfortable reading” for the Fed. The Federal Reserve has made tackling price growth one of the main goals of an aggressive tightening campaign, but inflation remains stubbornly above its stated 2% target.
Markets have all but wiped out earlier bets for a 25 basis point cut at the Fed's policy meeting in March and reduced the odds of that happening in May. U.S. Treasury yields, which typically move inversely to prices, rose in the wake of the numbers, particularly weighing on interest-rate-sensitive megacaps such as Google parent Alphabet (NASDAQ:), Facebook owner Meta Platforms (NASDAQ:) and the tech titan Microsoft (NASDAQ:).
2. Lyft shares slow aftermarket gains due to forecast typo
Shares of ride-hailing company Lyft sharply limited their gains in the aftermarket on Tuesday after the company's chief financial officer said the company incorrectly overstated a key full-year margin forecast.
Lyft had initially said it expects margin expansion of 500 basis points in 2024, sending its stock price soaring during extended trading hours. But the euphoria was later dampened when CFO Erin Brewer told analysts on a conference call that Lyft had misrepresented that outlook in its press release. Instead, the company actually sees growth of a more modest 50 basis points.
In premarket trading, Lyft shares maintained some of that earlier advance, driven in part by forecasts that free cash flow will be positive for the first time ever this year. Fourth-quarter earnings also beat Wall Street estimates.
More corporate reports are scheduled to be released on Wednesday, including quarterly results from cloud solutions provider Cisco Systems (NASDAQ:), hydrocarbon explorer Occidental Petroleum (NYSE:) and food company Kraft Heinz (NASDAQ:).
3. Sony confirms plan to take financial services division public
Sony (TYO:) has said it will move forward with listing its financial services unit next year, giving shares some support after the Japanese conglomerate cut its forecast for sales of its all-important PS5 gaming console.
In a statement, Sony confirmed previous plans to list the division, which includes services such as insurance and digital banking, adding that it would retain a stake of just under 20% in the company.
However, Sony warned that PS5 sales for the year ending March will be 21 million units, down from its previous forecast of 25 million units, due to weak demand during the key holiday shopping season. The gaming division's operating profit also fell by about a quarter due to hardware promotions and lower sales of first-party titles, although this was partially offset by strength in the movies, music and chips segments.
The Walkman inventor's total operating revenue rose 10% to 463.3 billion yen ($1 = 150.66 yen), beating expectations. Sony's Japan-listed shares closed slightly lower on Wednesday.
4. Bezos sold $4 billion worth of Amazon stock last week
Amazon.com (NASDAQ:) multibillionaire founder Jeff Bezos sold more shares of the e-commerce giant, bringing the total value of his stock sales to around $4 billion last week.
In a securities filing Tuesday, Amazon said that Bezos, the company's chief executive who has an estimated net worth of over $190 billion, according to Forbes, dumped 12 million shares for about $2 billion between Friday and Monday . Bezos has now sold 24 million shares this month.
Amazon previously announced that Bezos plans to sell 50 million shares by the end of next January – worth about $8.4 billion at current prices. The move comes as Amazon's share price has risen over 50% in the last twelve months and is currently near an all-time high.
Even after the sale, Bezos remains the company's largest shareholder, according to S&P Capital IQ data cited by the Financial Times.
5. Oil steamed
Oil prices hovered around zero in European trading on Wednesday as traders expected an outsized rise in inventories and high inflation numbers in the United States.
April oil prices rose 0.1% to $82.82 a barrel, while they were broadly unchanged at $77.57 a barrel by 5 a.m. ET. Both contracts were within sight of a two-week high.
Previously, crude oil prices had been hit by signs of continued price increases in the US, seen as a potential reason for the Fed to keep interest rates higher for longer – a trend that could slow economic activity and therefore oil demand in the coming months.
However, the declines were partially tempered by data from the American Petroleum Institute (API) showing that U.S. crude oil inventories rose by 8.5 million barrels in the week ended February 9, much more than estimates for an increase of 2.6 million barrels. The government's inventory figures are expected later on Wednesday.
Meanwhile, geopolitical tensions persist in the Middle East and Russia, threatening to exacerbate concerns about supplies from these key manufacturing regions.
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