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* CAI jumps on $ 1 billion Mitsubishi buyout deal
* Bank stocks prolong the declines
* CBOE volatility index jumps to 20 points
* Futures fall: Dow 0.91%, S&P 0.72%, Nasdaq 0.57% (add comment, details; update prices)
By Shashank Nayar and Medha Singh
June 18 (Reuters) – Major Wall Street indices were due to open sharply lower on Friday after St. Louis Federal Reserve Chairman James Bullard said inflation was higher than expected and needed several meetings at the Fed to determine how to reduce stimulus.
In an interview with CNBC, Bullard said he was among seven Fed officials who see rate hikes begin next year with the “end of the pandemic.”
The CBOE volatility index, Wall Street’s fear gauge, climbed to 20.60 points, its highest level since May 21 following his comments.
“Inflation data is going to remain loud and lead to volatility and we are seeing more and more investors trying to find their ground,” said David Grecsek, managing director of investment strategy and research at Aspiring in New York.
“There is a fair amount of data showing that inflation must remain transient, as well as data showing that inflation is rising more than expected.”
Major Wall Street indices were rocked earlier this week after the Fed unexpectedly signaled it could start cutting its massive stimulus package sooner than expected, putting the benchmark S&P 500 on the right track. way to break a three-week winning streak.
However, investors returned to tech-heavy stocks especially on Thursday, focusing on the Fed’s projection of the economy growing 7% faster than expected this year.
As of 8:40 a.m. ET, Dow e-minis were down 308 points, or 0.91%, S&P 500 e-minis were down 30.5 points, or 0.72%, and e-minis Nasdaq 100 were down 80 points, or 0.57%.
Russell 2000 futures fell 1.1%.
Friday is also the “quadruple day of the witches”, the simultaneous quarterly expiration of US options and futures that lead to increased trading volume at market close and can fuel market volatility.
The Dow blue chip is on track for its second straight week of losses, with mining, financial and industrial stocks among the biggest drops.
Shares of banks such as JPMorgan Chase & Co, Goldman Sachs Group Inc and Citigroup Inc fell 1%.
Transportation finance and logistics firm CAI International Inc jumped 46.0% after accepting a $ 1.1 billion takeover by Mitsubishi HC Capital Inc. (Report by Sagarika Jaisinghani, Medha Singh and Shashank Nayar in Bengaluru; edited by Maju Samuel)