Stock futures rose slightly on Tuesday night as investors awaited key U.S. inflation data that would impact the Federal Reserve’s interest rate policy. Futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all showed gains, indicating a positive outlook among investors. During regular trading on Tuesday, the Dow slipped slightly while the S&P 500 and Nasdaq Composite made modest gains.
The upcoming release of the March consumer price index (CPI) report on Wednesday morning is highly anticipated by economists and traders. The report is expected to show a 0.3% increase in March on a month-over-month basis and a 3.4% increase from the previous year. Core CPI, which excludes volatile food and energy prices, is predicted to rise 0.3% and 3.7%, respectively. The outcome of the CPI report will likely impact the Federal Reserve’s decisions on interest rates.
The Fed funds futures trading data suggests a 42% likelihood that the central bank will maintain rates in June, indicating uncertainty among traders. A higher-than-expected inflation reading could lead to a market pullback after significant gains this year, while a lower reading could cause Treasury yields to decrease and support equity markets. Investors will be closely monitoring the CPI data for insights into the inflation outlook and potential Fed actions.
Chief global strategist at LPL Financial, Quincy Krosby, noted concerns in the market regarding inflation and the potential impact on the economy. There is a fear of stagflation, where economic growth stagnates while inflation remains high. The data from the CPI report will play a crucial role in shaping market sentiment and influencing future monetary policy decisions by the Federal Reserve.
In addition to the inflation report, investors are eagerly awaiting the meeting minutes from the Fed’s previous gathering to gain further insights into rate cut expectations. The upcoming earnings season for the first quarter is also beginning, with Delta Air Lines scheduled to announce results on Wednesday. The combination of these factors will likely contribute to market volatility and shape investor sentiment in the coming days.
Overall, market participants are closely monitoring economic data, Fed policy decisions, and corporate earnings to make informed investment decisions. The release of the CPI report and meeting minutes from the Fed, along with upcoming earnings reports, will provide valuable insights for investors as they navigate the shifting landscape of the financial markets.
