And before too Risky Trade kicks off, let's go out to Chicago to see how the trading day is shaping up over at Cboe. Now, fintech TV correspondent Mark Payton is live from the Cboe trading floor. Good morning Mark. What a morning it has been. Of course, all of us were paying attention to the inflation figures.
But oil prices this morning we're back up of 100 for WTI. So what activity are you tracking in the premarket.
Yeah. Good morning Rami. Definitely an active morning. We're seeing a little back and forth in futures this morning. But right now S&P 500 futures are down about 2/10 of a percent ahead of the opening bell. And remember the S&P is already coming off three straight losing sessions including about a half percent decline yesterday.
So one of the things I'm watching today is whether buyers eventually step back in or we extend that losing streak to four here at Cboe. VIX futures are trading right around 17 a little plus this morning. That's a little higher than yesterday's VIX close of around 16.46. So there's definitely some additional caution being priced in.
But volatility is still relatively contained. The Russell 2000 fell about 1.3% yesterday much more than the S&P. That's important because the rut gives us a good read on risk appetite beyond the mega cap names. And it's worth mentioning, ten year Treasury yield is around 4.9, so its highest level in almost three years.
That's a big number for equity investors because higher treasury yields mean higher borrowing costs. And they also give investors a more attractive alternative to stocks. So heading toward the opening bell we've got stocks under some pressure or volatility ticking higher. Small caps coming off a tough session.
And yields remain elevated.
Yeah. And Mark in less than 24 hours we will be getting CPI figures. And that is a key report that all of us are waiting for especially ahead of next week's fed meeting. So given the fact that right now fed funds futures are pricing in about a 70% chance of a rate hike at next week's meeting, tell us how traders are digesting the PPI data that just came out.
Yeah. So the producer prices rose 4/10 of a percent in August, and they're now up 5.4% from a year ago. And just a reminder PPI is basically inflation from the producer side. So prices businesses are receiving for goods and services before some of those costs eventually work their way through to the consumer.
So when you dig into the report, goods prices jumped 1.1% and energy was a big part of that, up 4.2%. Services were much more contained of just one tenth of a percent. And if you strip out food, energy and trade services, that underlying measure rose three times for the month at 4.7 from a year ago. So I think the takeaway for traders is pretty straightforward.
Producer inflation remains elevated, but energy was a major driver of this month's increase. And now the question becomes what this means for rates in the fed. We've already got the ten year sitting close to 5%. So another firm inflation reading keeps rates front and center heading into next week's fed decision.
And we're not done with inflation data yet. As you mentioned tomorrow we get CPI.
Yeah. Thank you so much Mark. I'm sure all of us will continue to monitor energy prices throughout today's session heading into tomorrow's CPI print. So thank you so much for joining us this morning from the CBOE.
Thank you.
