Hotter Producer Prices Shake Market Optimism for Early Fed Policy Easing

Futures for the S&P 500 and Nasdaq fell on Friday after a higher-than-expected Producer Price Index data dampened hopes for an early Federal Reserve policy easing. The U.S. Labor Department reported a 0.2% monthly increase in June, higher than the anticipated 0.1%, and an annual rise of 2.6%.

Futures tracking the S&P 500 and the Nasdaq fell on Friday, following a hotter-than-expected producer prices inflation report, which dampened investors' hopes for an early start to the Federal Reserve's monetary policy easing. Data from the U.S. Labor Department revealed a 0.2% rise in the Producer Price Index (PPI) on a monthly basis in June, exceeding the 0.1% increase anticipated by economists polled by Reuters. On an annual basis, the PPI rose 2.6%, compared to the estimated 2.3% increase.

Excluding volatile food and energy components, the core PPI gained 0.4% month-on-month, higher than the expected 0.2% rise. On an annual basis, it surged 3%, surpassing the estimated 2.5% advance. By 8:31 a.m. ET, Dow e-minis rose 8 points, or 0.02%, S&P 500 e-minis fell 4.75 points, or 0.08%, and Nasdaq 100 e-minis declined 36.25 points, or 0.18%.