US stock index futures fell sharply today, suggesting a weaker market open, after government data showed US consumer prices rose faster than expected last month, stirring inflation worries.
Investors had been looking for signs of slower inflation in the belief they would allow the Federal Reserve to pause in its rate-raising campaign, giving relief to stocks.
"Clearly this is going to tilt the Fed a little bit more in favor of a hawkish position," said Les Satlow, portfolio manager at Cabot Asset Management in Salem, Massachusetts. "It's another negative data point on inflation. All things being equal, it is obviously not a good thing for the equity market."
S&P 500 futures were down 8.1 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures fell 61 points, and Nasdaq 100 futures fell 9.50 points.
CPI rose 0.6 percent in April, the Labor Department said, versus a forecast a of 0.5 percent rise by economists. Core CPI, which excludes food and energy costs, advanced 0.3 percent compared with a median forecast for core CPI of a 0.2 percent rise.
The CPI rise followed by a day another department report that showed producer prices rose more than expected last month, but core producer prices gained less than economists had forecast.
Technology shares may get a boost after Dow component Hewlett-Packard Co, the No. 2 computer maker, posted higher quarterly profit late on Tuesday. HP shares rose 5 percent to $32.65 before the opening bell on the Inet electronic brokerage system.