US stock index futures fell on Wednesday after the release of the Producer Price Index (PPI), which was higher than expected, weakening the market's betting on a rate cut by the Federal Reserve this year.
Data from the US Department of Labor showed that the PPI rose 3.4% year-on-year in February, higher than the market expectation of 2.9%; and increased 0.7% month-on-month, also above the expected 0.3%.
Excluding food and energy, the core PPI rose 3.9% year-on-year, slightly higher than the expected 3.7%; and increased 0.5% month-on-month.
After the data was released, interest rate expectations were significantly adjusted. The S&P 500 index futures fell by 0.22%, Nasdaq 100 futures by about 0.19%, and Dow futures by 0.24%.
Inflationary pressures exceeding expectations reinforced the market's expectation of "higher for longer" interest rates, prompting investors to reassess the monetary policy path.
