Stock futures were steady Monday evening as Wall Street prepared for the release of key inflation reports. S&P 500 futures were down 0.02%, Nasdaq 100 futures slipped 0.08%, and Dow Jones Industrial Average futures lost 0.02%. The Dow experienced its first losing session in nine days, breaking its longest daily win streak since December. The S&P 500 also saw a slight decline, while the Nasdaq Composite outperformed with a 0.3% increase.
The New York Federal Reserve released a report showing that consumers’ expectations for inflation in both the short and long term increased in April. This data put pressure on the major averages and weighed on stocks. On Tuesday morning, the first of two key inflation reports is set to be released. The producer price index for April will be issued at 8:30 a.m. Eastern, with economists predicting a 0.3% gain from the previous month. The consumer price index report is expected to come out on Wednesday, with economists anticipating a 0.4% increase in April on a month-over-month basis, or a 3.4% rise from 12 months earlier.
Despite the muted market action on Monday, the major averages remain close to their highs. Investors have been optimistic since Fed Chair Jerome Powell stated that the next move by the central bank was unlikely to be a rate hike, even in the face of recent high inflation readings. Chief investment officer at Northwestern Mutual Wealth Management, Brent Schutte, emphasized the difference in perspectives between Wall Street and Main Street. He noted that stock market movements are based on expectations of future economic performance rather than current conditions.
Schutte warned that investors who are counting on rate cuts to occur before any economic downturn may face risks. While it is common for Wall Street and Main Street to have differing views on the economy, this potential discrepancy underscores the need for investors to be cautious in their expectations. Overall, the market remains uncertain as it awaits the outcome of the upcoming inflation reports, which are likely to have a significant impact on future economic decision-making.
