Futures extend losses after September inflation data
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September CPI data higher than expected
Delta Air Lines down after Q3 results
Futures down: Dow 0.26%, S&P 500 0.37%, Nasdaq 0.52%
Updated at 8:50 a.m. ET/1250 GMT
By Lisa Pauline Mattackal and Pranav Kashyap
Oct 10 (Reuters) - Wall Street futures extended losses on Thursday after data showed U.S. inflation was higher than expected in September, keeping the Federal Reserve on track to ease interest rates by 25 basis points at its next meeting.
The closely watched Consumer Price Index rose 0.2% on a monthly basis and 2.4% on an annual basis, with both figures being slightly higher than estimates by economists Reuters polled.
The core figure, which excludes volatile food and energy prices, rose 3.3% year-over-year, versus an estimated 2.3%.
Dow E-minis 1YMcv1 were down 112 points, or 0.26%, S&P 500 E-minis EScv1 were down 21.5 points, or 0.37% and Nasdaq 100 E-minis NQcv1 were down 106.25 points, or 0.52%.
After the inflation data was released, traders firmed bets on a 25-bps cut in November at 85%, with a 15% chance of no change at all, according to CME's FedWatch.
"The market's reacting because you're pricing out the possibility of big Fed rate cuts and the risk that the Fed isn't going to be as supportive to markets," said Cameron Dawson, chief investment officer at NewEdge Wealth.
However, weekly jobless claims also rose to 258,000 for the week ending Oct. 5, versus an estimate of 230,000.
"The CPI data coming in hotter than expected, and at the same time initial jobless claims really picked up, is certainly a confusing message for markets," Dawson said.
"Whether or not that means the Fed is going to be able to deliver the full extent of its expected interest-rate cuts is a good question."
Meanwhile, Delta Air Lines DAL.N lost 1.2% after forecasting quarterly revenue below expectations in anticipation of slower travel spending.
Other airlines also lost ground, with United Airlines UAL.O down 1.1%, American Airlines AAL.O losing 1% and Southwest Airlines LUV.N slipping 0.8%.
Equity market performance has been largely led by expectations for easing monetary policy, with traders now scrutinizing how much further the central bank will lower borrowing costs this year.
Among other single movers,shares of Pfizer PFE.N fell 1.3% as former executivesdistanced themselves from activist investor Starboard's campaign against the drugmaker.
Both theS&P 500 .SPX and the Dow notched up record closing highs on Wednesday, after minutes from the Federal Reserve's last meeting showed a "substantial majority" of policymakers had favored September's outsized 50-basis-point rate cut.
The start of the third-quarter earnings season is also in focus,with major banks scheduled to report results on Friday. Their results will be key in ascertaining if the recent equity rally is sustainable.
The third-quarter earnings growth rate for the S&P 500 is estimated at 5% year-over-year, according to estimates compiled by LSEG.
Apart from earnings, investors aregrappling with rising Treasury yields - the benchmark 10-year Treasury note yield is trading around its highest since late July - along with the impact of the Middle East conflict on oil prices and the upcoming U.S. presidential election.
Investors were also monitoring the impact from Hurricane Milton, which made landfall on Florida's west coast late on Wednesday.
Reporting by Lisa Mattackal and Pranav Kashyap in Bengaluru; Editing by Pooja Desai
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