U.S. stock index futures fell on Thursday as investors braced for the much-anticipated inflation report, which is expected to provide clues about the likely path central bank policymakers will take for the rest of the year.
Most megacap stocks were flat to lower in early morning trading, although Tesla ( NASDAQ:TSLA ) gained 1.1% ahead of the much-anticipated unveiling of its robotic taxi at an event later in the day.
Dow E-minis were down 44 points, or 0.10%, S&P 500 E-minis were down 10 points, or 0.17%, and Nasdaq 100 E-minis were down 40.5 points, or 0.20 %.
The S&P 500 and Dow hit record closes on Wednesday after minutes of the U.S. Federal Reserve’s latest meeting showed a “substantial majority” of policymakers favored September’s supersized 50 basis point rate cut.
In the wake of strong economic data last week, traders have steadily cut bets on a 50 basis point rate cut at the Fed’s next meeting, now pricing in an 82% chance of a 25 basis point cut in November and an 18% chance of none change.
All eyes will be on the consumer price index report due at 8:30 am. Greek time, for information on the central bank’s battle with inflation and its effects on borrowing costs.
September’s CPI is expected to show that core inflation will hold steady at 3.20% on a year-on-year basis, easing slightly to 0.2% from the previous month, according to economists polled by Reuters .
“The CPI report is likely to show that inflation has moderated and may even cool further. Price stability is likely to prove critical to extending the economic cycle,” said Scott Helfstein, chief investment strategist at Global X.
“There is no reason for the Fed to deviate from the 25 bp cuts. until (the) end of the year, given the favorable economic environment.”
Weekly jobless claims data is also scheduled for release at 8:30 AM. ET of the day.
Attention will also turn to the start of the third-quarter earnings period, with major banks scheduled to report on Friday.
Third-quarter earnings growth for the S&P 500 is estimated at 5% year over year, according to estimates compiled by LSEG. This will be a key test to see if the stock’s recent rally is sustainable.
In addition to earnings, investors are grappling with rising government bond yields – the yield on the benchmark 10-year government bond is trading around its highest level since late July – along with the impact of the Middle East conflict on oil prices and the upcoming US presidential election.
Investors are also monitoring the fallout from Hurricane Milton, which made landfall on Florida’s west coast late Wednesday.
Among individual moves, shares of Pfizer (NYSE:PFE) fell 1.5% as former executives distanced themselves from activist investor Starboard’s campaign against the drug industry.
Delta Air Lines ( NYSE:DAL ) lost 6.3% after the Atlanta-based carrier reported adjusted third-quarter earnings of $1.50 per share, below the $1.52 analysts had estimated.
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Reference;
Karaahmetovic, V. (2024) AMD’s AI product event likely to be ‘a fade-the-news event’ says analyst By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/stock-market-news/amds-ai-product-event-likely-to-be-a-fadethenews-event-says-analyst-3657633 (Accessed: 10 October 2024).
