U.S. stock futures were relatively stable on Wednesday night as investors awaited the release of September’s consumer price index report. Futures tied to the Dow Jones Industrial Average were near the flatline, with S&P 500 futures slightly lower by 0.03% and Nasdaq 100 futures down by 0.04%. Despite this, both the S&P 500 and Dow had ended Wednesday’s session with fresh record closes, with the S&P 500 rising 0.71% and the Dow jumping more than 400 points or 1%. Big technology stocks were notable gainers in the rally, contributing to a 0.6% advance in the Nasdaq Composite.
Investors are eagerly awaiting September’s CPI report due on Thursday morning to gauge whether inflation is on a cooling trend. Economists expect a 0.1% increase on a monthly basis and a 2.3% advance over the past 12 months. This data will also play a significant role in influencing the Federal Reserve’s next policy actions at its November meeting. Fed funds futures trading data indicates a 70% likelihood of a quarter-point rate cut according to CME Group’s FedWatch tool. Stephanie Roth, chief economist at Wolfe Research, believes a 50 basis point cut is unlikely, and the primary question is whether the Fed will decide to trim rates by 25 basis points or maintain the status quo. The expectation is that the Fed will be able to cut rates, with core CPI forecasted to increase by 0.2% on a monthly basis while excluding food and energy prices.
In addition to the CPI report, other economic indicators scheduled for release on Thursday morning include weekly initial jobless claims. These figures are expected to provide further insight into the current state of the labor market. Wall Street will also be keeping a close eye on Delta Air Lines’ quarterly earnings report before the trading session begins on Thursday. The company’s performance will be closely monitored by investors and analysts to assess the impact of the ongoing pandemic on the airline industry and broader economic recovery.
Overall, the stock futures market remains cautiously optimistic as investors await key economic data releases and corporate earnings reports. With the S&P 500 and Dow achieving record closes, there is a sense of positive momentum in the markets. However, concerns about inflation and the Federal Reserve’s upcoming policy decisions loom large, with the potential for rate cuts influencing investor sentiment. The performance of big technology stocks has been a significant contributor to recent gains, highlighting the ongoing importance of this sector in driving market movements.
As the markets brace for Thursday’s economic releases and corporate earnings reports, there is a sense of anticipation and uncertainty regarding future market trends. The impact of the ongoing pandemic, inflation rates, and the Federal Reserve’s policy decisions will continue to be key factors influencing investor behavior and market volatility. While the stock futures market may be relatively stable at the moment, underlying concerns about the broader economic environment persist, shaping the investment landscape for the foreseeable future.
