US index futures were slightly in the red amid scarce positive news, while geopolitical tensions lingered.
However, concerns about higher interest rates remain a key driver behind the recent sell-off in stocks. Those concerns intensified after the UK’s inflation fell less than expected on Wednesday. Consequently, any prospect of market rebound now hinges significantly on corporate earnings. This was evident on Wednesday as positive earnings in Europe lifted the indexes, if only temporarily.
Both US and global stock indexes have fallen out of favor in recent weeks, as investors exhibit hesitancy towards risk-taking. Initially, traders had priced in approximately six rate cuts for 2024, but uncertainty now looms over the likelihood of even receiving a 50 basis point cut by December. The market consolidated on Tuesday before breaking further lower on Wednesday. So, the path of least resistance is clearly to the downside, at least as far as the short term is concerned.