Futures tread water ahead of inflation data, Fed outlook

Futures tread water ahead of inflation data, Fed outlook

(Reuters) – U.S. stock index futures were flat to slightly higher on Wednesday as investors awaited a crucial inflation report and the conclusion of the Federal Reserve’s policy meeting.

Markets were generally cautious this week, looking for clearer signs on the likely policy trajectory, even as a rise in Apple shares helped the S&P 500 and Nasdaq post closing highs for the second straight session on Tuesday.

Apple shares edged down 0.7% premarket. The tech giant had jumped more than 7% to a record high in the previous session as investors applauded new AI features in its devices.

With a market capitalization of $3.18 trillion as of Tuesday’s close – just behind Microsoft – this latest surge has seen Apple firmly reclaim its place ahead of AI chip giant Nvidia, with $2.97 trillion in the market. race for pole position as the world’s most valuable company.

The Consumer Price Index report for May is due at 8:30 a.m. ET, while the Fed’s policy announcement is expected at 2 p.m. ET.

“Today’s CPI (and) the subsequent Fed meeting are so anticipated that a lot depends on them…and we may be overdue for a small correction,” David said Morrison, senior market analyst at Trade Nation. .

Core inflation for May is expected to remain stable at 0.3% for the month and decline slightly to 3.5% year-on-year. The headline CPI on a monthly basis is expected to decline to 0.1% from 0.3%.

“I think the market will be extremely happy if the numbers come in as expected, given that this is still a bull market,” Morrison said.

With rates largely expected to remain unchanged, markets will focus primarily on the central bank’s updated summary of economic projections, particularly the dot plot, which shows where policymakers expect rate levels to interest continues this year and in the long term.

Even as Wall Street has rallied in recent months, much of those gains have been driven by mega-cap growth and technology stocks, leading some market participants to worry about sustainability. of the strength of stocks, particularly if the Fed proves more hawkish.

While the S&P 500 technology index posted a record close last session, nine of its 11 major sectors were in the red, while the small-cap Russell 2000 fell 0.4%.

Markets now believe the likelihood of a first Fed rate cut in September is lower, with a probability of just over 50%, according to the CME’s FedWatch tool.

As of 5:25 a.m. ET, the Dow e-minis were up 17 points, or 0.04%, the S&P 500 e-minis were up 4.75 points, or 0.09%, and the e-minis were up 4.75 points, or 0.09%. -minis of the Nasdaq 100 were up 22.75 points, or 0.12%.

Among individual movers, Oracle gained 8.9% after forecasting double-digit revenue for fiscal 2025 after the bell on Tuesday.

Paramount Global fell 2.3% after Shari Redstone, its largest shareholder, ended negotiations for a possible merger with David Ellison’s Skydance Media, sources said.

Electric vehicle maker Nio’s U.S. stock price fell 3.5% after a report that the European Commission would apply additional duties on imported Chinese electric vehicles.

(Reporting by Lisa Mattackal in Bangalore; Editing by Pooja Desai)

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