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U.S. stock index futures experienced slight declines on Wednesday morning as the market rally following the election took a pause, with investors shifting their attention to the upcoming U.S. inflation data. As of 05:45 ET (10:45 GMT), Dow Jones Futures were down 55 points, or 0.1%, S&P 500 Futures slipped 8 points, or 0.1%, and Nasdaq 100 Futures fell 30 points, or 0.1%.
On Tuesday, major Wall Street indices retreated from record highs. The S&P 500 declined by 0.3%, the NASDAQ Composite fell 0.1%, and the Dow Jones Industrial Average saw a 0.9% decrease, as investors chose to secure some of their recent gains.
The focus is now on the U.S. Consumer Price Index (CPI) data set to be released later in the day. The inflation report could influence the Federal Reserve’s decision on whether to make further adjustments to interest rates. Donald Trump’s re-election has already sparked a rally in stocks, but his proposed trade and immigration policies have raised concerns about longer-term inflationary pressures.
Analysts anticipate that the CPI will show a 2.6% annualized increase in headline inflation for October, up from 2.4% in September. On a month-to-month basis, inflation is expected to remain steady at 0.2%. The core inflation rate, which excludes the more volatile food and fuel prices, is projected to remain at 3.3% annually and 0.3% monthly, mirroring September’s figures.
Minneapolis Fed President Neel Kashkari cautioned that any unexpected inflation readings could lead the Federal Reserve to keep rates steady in December. Meanwhile, Richmond Fed President Thomas Barkin expressed the central bank’s readiness to respond to any resurgence in inflation.
Following these comments, market data indicated a 59.8% probability of a 25-basis-point interest rate cut by the Fed in December, with a 40.2% chance of rates remaining unchanged. Last week, the Federal Reserve reduced interest rates by 25 basis points and emphasized its commitment to a data-driven approach for any future policy changes.
