Nasdaq 100: Tech Stocks Weigh Down Futures After Hot Inflation Report

What’s Moving the Markets Today?

U.S. stock futures fell Thursday morning as traders reacted to a hotter-than-expected Producer Price Index (PPI) report for November. Weakness in tech shares and mixed corporate updates added to the cautious tone ahead of next week’s Federal Reserve meeting.

Inflation Concerns Take Center Stage

November’s PPI rose by 0.4%, exceeding the 0.2% increase expected by economists surveyed by Dow Jones. The higher-than-anticipated number suggests persistent inflationary pressures at the wholesale level.

Despite the PPI surprise, traders widely expect the Federal Reserve to proceed with a 25 basis-point rate cut next week. According to CME FedWatch data, the likelihood of such a move stands at 98%. Analysts, including Clark Bellin of Bellwether Wealth, suggest the Fed will focus on the broader improvement in inflation metrics seen in recent months.

Tech Stocks Under Pressure

The tech sector struggled in premarket trading, dragging down sentiment. Adobe shares plunged over 11% after issuing disappointing revenue guidance for the current quarter. The software giant forecasted $5.63 billion to $5.68 billion in revenue, below the $5.73 billion consensus estimate.

Chewy also slipped 3% after announcing a $500 million share offering, raising dilution concerns. Losses in these key stocks weighed on Nasdaq 100 futures, which declined 0.5%.

Energy and Staples Find Support

Energy and consumer staples stocks emerged as outperformers. Constellation Energy rose 2% following an upgrade to “Buy” from Bank of America, which highlighted its strong positioning amid favorable regulatory trends and tightening supply conditions.

Celsius Holdings gained nearly 4% after JPMorgan initiated coverage with an “Overweight” rating, pointing to growth in the energy drink category and improved inventory conditions. Beverage heavyweights Coca-Cola, PepsiCo, and Keurig Dr Pepper each rose around 1% after Deutsche Bank upgraded them, citing optimism around higher consumer spending and restaurant traffic in 2024.

Warner Bros. Drives Entertainment Gains

Warner Bros. Discovery shares surged 6% following its announcement to separate cable TV operations from its growing streaming and studio businesses. Investors viewed the decision as a strategic pivot to unlock value in high-growth segments.

Meanwhile, apparel retailer Oxford Industries dropped about 4% after reporting third-quarter results below expectations. Warner Bros.’ gain stood out as a positive story in an otherwise mixed corporate landscape.

Market Outlook: What’s Next for Stocks?

While the strong PPI report signals lingering inflation, markets appear confident that the Federal Reserve will maintain a dovish path. However, persistent tech sector weakness may continue to weigh on broader indexes.

In the short term, the S&P 500 could face bearish sentiment, particularly if selling pressure in high-growth names extends. Defensive plays in energy and staples may offer stability as traders position for year-end market moves.

More Information in our Economic Calendar.