(Reuters) -U.S. stock index futures fell on Wednesday after soaring oil prices fed into fears of higher inflation, while a survey showing a strong rise in private jobs last month fueled concerns of sooner-than-expected easing of monetary stimulus.

The ADP National Employment Report showed private payrolls increased by 568,000 jobs in September. Economists polled by Reuters had forecast private payrolls would increase by 428,000 jobs.

“In short, it looks like the gain in employment will qualify as ‘decent’, which is the threshold Fed Chair Jerome Powell has suggested to push ahead with a QE tapering announcement at the late-November meeting,” said Paul Ashworth, chief U.S. economist at Capital Economics.

The numbers come ahead of the more comprehensive non-farm payrolls data on Friday, which is expected to cement the case for the Federal Reserve’s slowing of asset purchases.

The benchmark U.S. 10-year yield touched its highest since June earlier in the session, slamming shares of mega-cap growth companies including Apple Inc, Facebook, Amazon.com Inc and Alphabet Inc, which fell about 1% each after staging a strong rebound on Tuesday. [US/]

Economy-sensitive parts of the market also came under pressure, with lenders such as Bank of America Corp, JPMorgan Chase & Co and Morgan Stanley shedding about 1% each.

Planemaker Boeing Co as well as industrial conglomerates Caterpillar Inc and 3M Co dropped between 0.8% and 1.3%.

Asian and European stocks fell earlier in the day as oil hit a multi-year high above $83 a barrel amid a rally in global energy prices, fuelling concerns that major central banks will tighten monetary policy to counter sharp price rises. [MKTS/GLOB]

“The spike in energy prices continue fueling expectations of higher inflation for longer. Therefore, central banks will be forced to cool down the overheating in inflation rather than trying to boost recovery,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

A stalemate over Republicans and Democrats about the debt limit showed no sign of abating, with President Joe Biden saying that his Democrats might make an exception to a U.S. Senate rule to allow them to extend the government’s borrowing authority without Republican help.

Up to Tuesday’s close, the S&P 500 index logged its fourth straight day of 1% moves in either direction. The last time the index saw that much volatility was in November 2020, when it rose or fell 1% or more for seven straight sessions.

At 8:38 a.m. ET, Dow e-minis were down 250 points, or 0.73%, S&P 500 e-minis were down 39 points, or 0.9%, and Nasdaq 100 e-minis were down 155 points, or 1.06%.

American Airlines Group slipped 3.3% after Goldman Sachs cut its rating on the carrier to “sell” from “neutral”.

Shares in steelmaker Nucor Corp dropped 2.6% after Goldman Sachs lowered its rating to “neutral” from “buy”.

Source: Read Full Article