Technology Stocks Slide as US Inflation Pressures Accelerate

Technology stocks have remained under pressure overnight and into this morning, particularly in Asia Pacific and NASDAQ trading. While earnings reports continue to roll out, mainly from US regional banks, today’s focus has shifted to economic data. Stronger-than-expected retail sales point to consumer resilience, but a sharp rise in producer prices signals mounting inflation pressures. NASDAQ futures are down 1.2%, extending yesterday’s 1.9% loss, while Dow futures are up 0.3%.

US retail sales rose 0.8%, exceeding Street expectations of 0.3%, although slowing from the previous 1.2% increase. Producer prices climbed 6.3%, well above the Street’s 5.3% forecast and the previous 5.4% reading. Manufacturing surveys delivered mixed signals: the Empire State Manufacturing Survey rose to 25.5 (Street: 10.3; previous: 7.6), while the Philadelphia Fed Manufacturing Survey fell to 20.9 (Street: 28.4; previous: 37.8). Canadian manufacturing sales increased 1.5% in August, exceeding Street expectations of 1.1%.

Asia Pacific markets suffered steep declines, with the Nikkei falling 4.9%, the Hang Seng losing 1.0% and the Kospi dropping 7.6%. European trading has been mixed, with the DAX down 0.4% and the FTSE up 0.8%.

In Commodities, Crude Oil is steady near $95.00/bbl, while Brent Crude is down 1.6%, sliding below $105.00/bbl. Gasoline has fallen 2.3%, slipping under $3.20/gallon. Precious metals are recovering, with Gold up 1.5%, although still well below $4,200/oz, and Silver gaining 1.7%. Copper is down 1.4%, falling below $6.60/lb.

Treasury yields have retreated, with the US 10-year yield dropping below 5.10% and the US 30-year yield falling towards 5.40%. In Currencies, the US Dollar Index is down 0.4%, while the Euro has gained 0.4% and the Loonie is up 0.2%.

Friday morning brings US industrial production data and earnings from insurance giant Travelers.

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