US pre-open: Futures fall on weak data, inflation fears

(Sharecast News) - US stock futures fell on Thursday, pointing to third straight day in negative territory, as a mixed economic outlook continued to weigh on investors' appetite for risk. In pre-market trade, the Nasdaq was down 0.5%, the Dow fell 0.1% while the S&P 500 slipped 0.2%.

Yet more weak economic data was dampening sentiment with both Chinese imports and exports tumbling in August, albeit by less than expected, while German industrial output dropped 0.8%, worse than forecasts.

The S&P 500 reached a one-month high last Friday after the non-farm payrolls report raised hopes that the Federal Reserve would hold off from any further rate hikes at its next meeting.

However, markets have pulled back over recent days on the back of heightened concerns over inflation following a surge in oil prices and ISM data showing a strengthening US services sector.

"Will they, won't they? The guessing game regarding the next steps for central banks lifting interest rates is giving investors a headache," says Russ Mould, investment director at AJ Bell.

"Each day brings a new take on the matter - one minute people are saying that rates are near the peak of the cycle as wage growth slows and pockets of inflation ease, the next we have signs that the economy is staying strong and input cost pressures remain."

Bond yields meanwhile continue to trade close to their recent highs, having peaked at a 15-year high last month. On Thursday, the 10-year Treasury yield was down 1.5 basis points at 4,269%.

A handful of Federal Reserve members were scheduled to speak on Thursday, including Philly Fed's Patrick Harker, New York Fed's John Williams and Fed governor Michelle Bowman. Meanwhile, US jobless claims figures were due for release at 0830 ET.

In stock movements, Apple futures were lower on reports that China is banning government officials from using the iPhone.

"With the tech powerhouse having a huge Chinese presence, any move toward positioning their product as an external security risk will do little to help sentiment for sales in the region," said analyst Joshua Mahony from Scope Markets.