US stocks: Futures slide on inflation fears, eyes on Powell-Biden talks

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U.S. stock index futures fell on Tuesday as soaring oil prices and hawkish comments from a Federal Reserve official spooked investors, with the focus on talks between U.S. President Joe Biden and Fed Chairman Jerome Powell later in the day.

As U.S. traders returned from a long weekend, European stocks slid and Brent crude soared above $120 a barrel after the European Union agreed to a partial ban on Russian oil and the China decided to lift some COVID-19 restrictions earlier this week.

Fed Governor Christopher Waller said on Monday that the US central bank should be ready to raise rates by half a percentage point at every meeting from now until inflation is firmly under control. .

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Waller’s comments sparked a sell-off in bond markets, with the benchmark 10-year US Treasury yield hitting a one-week high, as traders backtracked on recent expectations that the Fed could pause after increases in June and July.

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Biden said the Fed has primary responsibility for controlling inflation and pledged not to “seek to influence its decisions inappropriately” ahead of a meeting with the central bank chief on Tuesday.

Stock markets have sold off sharply this year amid the conflict in Ukraine, rising COVID-19 cases in China and tighter financial conditions.
The three major U.S. indexes posted their longest weekly losing streak in decades last week as signs of a spike in inflation and consumer resilience pulled buyers back into the market.

The benchmark S&P 500 gained 0.6% this month after falling 8.8% in April, while the blue-chip Dow Jones rose 0.7%.

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The tech-heavy Nasdaq was on course for its second straight monthly loss, down 1.7% in May, as high-growth stocks tend to underperform when interest rates rise.
As of 7:33 a.m. ET, Dow e-minis were down 165 points, or 0.5%, S&P 500 e-minis were down 18 points, or 0.43%, and Nasdaq 100 e-minis were down 7.25 points, or 0.06%.

U.S.-listed shares of Yamana Gold Inc jumped 17.2% after South African miner Gold Fields Ltd agreed to buy the Canadian miner in a 6.7 all-stock deal billions of dollars.
Occidental Petroleum rose 2.5% to lead gains among energy stocks.

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