Traders work on the floor of the New York Stock Exchange during afternoon trading on April 09, 2024 in New York City.
Michael M. Santiago | Getty Images
Stock futures hovered near the flatline Tuesday night as investors await key U.S. inflation data that will inform the Federal Reserve’s path on rate policy.
Futures tied to the Dow Jones Industrial Average added 19 points, or 0.05%. S&P 500 futures traded higher by 0.03%, while Nasdaq 100 futures inched up by 0.04%.
During Tuesday’s regular trading, investors appeared to be in a holding pattern ahead of the March consumer price index report. The 30-stock Dow slipped 0.02%, while the S&P 500 gained 0.1%. The Nasdaq Composite inched higher by 0.3%.
The CPI report, which is set to release on Wednesday at 8:30 a.m. ET, is estimated to have increased 0.3% in March on a month-over-month basis and 3.4% from 12 months earlier, according to economists surveyed by Dow Jones. Economists expect core CPI, which excludes volatile food and energy prices, to rise 0.3% and 3.7%, respectively.
Traders are looking to the CPI data for clues on how central bank policymakers may proceed on interest rates — and the outcome is sure to affect Wednesday’s market moves. Fed funds futures trading data suggests a 42% likelihood that the central bank will hold steady on rates in June, according to the CME FedWatch Tool.
A hotter-than-expected inflation reading could lead to a serious pullback after the market’s run-up this year, while a cooler print could lead Treasury yields to pull back and lift the equity market, according to Quincy Krosby, chief global strategist at LPL Financial.
“The market is increasingly concerned that inflation remains more stubborn, or perhaps even stalled in its downward trajectory,” Krosby said. “There’s a whiff of stagflation hovering over markets if the Fed goes ahead with initiating the easing cycle without inflation quickening its downward path.”
In addition to the big inflation report on Wednesday, investors are also looking forward to the meeting minutes from the Fed’s gathering last month. They will be hunting for clues on where policymakers stand on expected rate cuts this year.
Earnings season for the first quarter is also about to kick off. Delta Air Lines is slated to post results Wednesday before the bell.