Wall Street holds its breath: new inflation figures at 2:30 p.m.

U.S. stock markets are facing an exciting trading day on Friday. Following disappointing inflation figures and a sharp rise in U.S. interest rates, investors are particularly focused on new producer price figures.

These will be released at 2:30 p.m. Dutch time and could have significant implications for expectations regarding the Federal Reserve's interest rate policy.

Meanwhile, issues at technology companies and geopolitical tensions are creating additional uncertainty.

U.S. stock futures are showing little movement so far on Friday. Investors appear to be postponing their major decisions until the publication of the new inflation figures.

Sentiment on Wall Street has deteriorated over the past few days. Technology companies, in particular, are under pressure. Nvidia lost 4.3 percent on Thursday and has already declined in value by more than 22 percent over the past month. According to reports, the departure of CEO Jensen Huang is causing additional unrest around the chip manufacturer.

Microsoft is also taking a hit. A global outage affecting Microsoft 365 is impacting services such as Outlook, Teams and Copilot. Microsoft's stock fell by almost two percent in pre-market trading on Friday.

The problems are arising at a sensitive time. Technology stocks have risen sharply in recent years, partly due to the high expectations surrounding artificial intelligence. As a result, investors are scrutinizing developments that could undermine earnings growth or confidence in these companies.

The main source of uncertainty remains US inflation. Earlier this week, it emerged that consumer prices had risen more sharply than expected. As a result, fears are growing that the Federal Reserve will have to keep interest rates high for longer or even raise them again.

These concerns are clearly evident in the bond market. The yield on ten-year U.S. Treasury bonds has risen to around 5.13 percent. Shortly before that, it was still around 4.86 percent. The yield on two-year government bonds is around 4.85 percent.

Higher bond yields make borrowing more expensive for businesses and consumers. At the same time, government bonds become more attractive compared to equities. Technology companies, in particular, may suffer from this, as investors place less value on future profits when interest rates are higher.

A tougher tone is also being heard within the Federal Reserve. Board member Christopher Waller has raised the possibility of a 0.50 percentage point interest rate hike in December.

Economist Oscar Munoz of TD Securities expects a less significant but sustained series of interest rate hikes. According to his scenario, the central bank will raise interest rates by 0.25 percentage points in December, January and March.

At 2:30 p.m. Dutch time, the U.S. Producer Price Index figures, better known as the PPI, will be released. These figures show how fast the prices that producers receive for their goods and services are rising.

The U.S. PPI figures will be released at 2:30 p.m. Download the Newsbit app and be the first to find out what this means for the financial markets.

Investors primarily monitor core inflation, which excludes highly volatile components such as food and energy. Economists expect a monthly increase of 0.3 percent for October. In September, this increase was still 0.7 percent.

A lower figure could alleviate concerns about persistent inflation. This could allow for a decline in bond yields and a recovery in the stock market. If, on the other hand, the figures are higher than expected, the pressure on Wall Street could increase further.

The price of oil also deserves attention. Brent crude oil costs around $96 per barrel. Tensions surrounding Iran are keeping the energy market on edge and could influence inflation expectations.

Later in the day, speeches by several Federal Reserve officials are also scheduled. Their statements may shed light on the central bank's view of recent inflation trends.