Wall Street's main indexes were set to fall at the open on Wednesday as data showing a surge in US consumer prices last month deepened fears that high inflation is here to stay.
The Labor Department's report also showed that in the 12 months through October the consumer price index increased 6.2%, the largest year-on-year advance since November 1990, as supply bottlenecks persist.
"Even though the Federal Reserve believes that inflation is transitory, the evidence is starting to add up that that's not true," said Rick Meckler, partner at Cherry Lane Investments In New Vernon, New Jersey.
"The Fed has made very few moves outside of what they've told the markets they plan to do, but I think even they've got to be a little concerned by the strength of the increase."
The report comes a day after producer prices data showed a solid rise in October and highlights the extent to which manufacturers were passing on higher costs to consumers, whose spending accounts for 70% of the US economy.
Wall Street's main indexes ended their long streak of record closing highs on Tuesday as investors booked profits from the recent run-up in gains, especially in the absence of market-moving catalysts.
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"It is just a natural breather. The markets moved quite a bit in a short period of time off at September lows," said Thomas Hayes, managing member, Great Hill Capital LLC, New York.
Wednesday's losses also came after data showed Chinese factory gate prices hit a 26-year high in October, while economic advisers to the German government said they expected the current rise in inflation to continue well into 2022.
Big industrial and energy firms such as Caterpillar Inc , 3M Co and Chevron Inc shed between 0.2% and 0.3%.
Mega-cap technology and communications companies including Apple Inc, Microsoft Corp, Amazon.com Inc , Meta Platforms Inc, formerly known as Facebook, and Alphabet Inc dropped between 0.3% and 1.1%.
Tesla Inc shares fell 1.5%, set to open lower for the fourth session and putting at risk the electric-car maker's position in the $1 trillion club.
At 8:51 a.m. ET, Dow e-minis were down 61 points, or 0.17%, S&P 500 e-minis were down 16 points, or 0.34%, and Nasdaq 100 e-minis were down 108.25 points, or 0.67%.
Another report from the Labor Department showed initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 267,000 for the week ended Nov. 6.