Treasuries Fall, U.S. Futures Rise After CPI Data: Markets Wrap

(Bloomberg) — U.S. Treasuries fell and equity futures were mixed after data showed that consumer prices rose more than forecast last month, stoking concern that inflation may prompt the Federal Reserve to reign in its ultra-accomodative policies.

The 10-year Treasury yield spiked above 1.5%, pausing a rally that took the benchmark to the lowest since March on Wednesday. Contracts on all of the major U.S. equity indexes turned higher after the release, led by those on the Dow Jones Industrial Average.

Prices paid by U.S. consumers rose in May at the fastest pace since 2009, extending a buildup in inflation that risks becoming overheated as the economy strengthens, Labor Department data show. The consumer price index report comes after rangebound trading characterized the start of June as investors awaited some impetus from progress reports on the global economic recovery. American equities have been hovering around all-time highs, while yields have been easing for weeks. A frenzy in meme stocks and gyrations in cryptocurrencies are among the few sources of pronounced market volatility.

“The hot print on inflation has to be getting the Fed’s attention,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “It will still likely be chalked up to transitory base effects, but the CPI print alongside recent releases on higher wages will only turn up the volume on taper talk.”

In pre-market action, GameStop Corp. shares fell after the company said it planned to offer more shares and disclosed that regulators are investigating trading of its stock. Other retail trader favorites were mixed, with some of the stocks that surged amid the frenzy on Wednesday giving back gains.

Commodities, one of the leading reflation plays, continued to stall. Oil erased an earlier loss triggered by fears of oversupply. Bitcoin held an advance.

For market commentary, follow the MLIV blog.

Here are key events to watch this week:

Group of Seven leaders’ summit starts in Cornwall, England Friday.

These are some of the main moves in markets:

Stocks

Futures on the S&P 500 rose 0.3% as of 9:08 a.m. New York timeFutures on the Nasdaq 100 rose 0.1%Futures on the Dow Jones Industrial Average rose 0.4%The Stoxx Europe 600 was little changedThe MSCI World index was little changed

Currencies

The Bloomberg Dollar Spot Index fell 0.1%The euro was little changed at $1.2185The British pound rose 0.2% to $1.4149The Japanese yen was little changed at 109.68 per dollar

Bonds

The yield on 10-year Treasuries advanced three basis points to 1.52%Germany’s 10-year yield advanced two basis points to -0.23%Britain’s 10-year yield advanced four basis points to 0.77%

Commodities

West Texas Intermediate crude rose 0.5% to $70 a barrelGold futures fell 0.1% to $1,893 an ounce

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