Futures fall as markets await Fed decision on CPI

Futures fall as markets await Fed decision on CPI

Tuesday’s slight decline in U.S. stock index futures was expected during a quiet session as investors anticipated the release of important inflation data and a Federal Reserve policy statement on Wednesday.

In a tumultuous session on Monday, the S&P 500 and the Nasdaq recorded record closing highs, helped by Nvidia shares following its 10-for-one stock split.

U.S. stock index futures

Premarket trade saw Nvidia remain unchanged, but Apple’s stock dropped 0.7% as investors were not satisfied by the much-anticipated AI plan that the company unveiled on Monday at its developer conference.

The Consumer Price Index report for May and the end of the Fed’s two-day policy meeting are scheduled to be released on Wednesday. The central bank will issue its updated economic estimates and “dot plot” but is not expected to alter interest rates.

Investors will be keenly examining the CPI figures and the Fed’s estimates because recent reports have sent mixed messages about the underlying strength of the economy.

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The CME’s FedWatch tool indicates that markets are pricing in a little over 50% possibility that the Fed will drop rates for the first time in September

“Lower commodity prices coupled with anticipated revisions in rental index computations, could yield to more favorable inflation numbers in the coming months. Jeremy Siegel senior economist at WisdomTree, wrote in a note that “this improvement would be a positive development for the markets and should influence the Federal Reserve’s rate decisions.”

“Nevertheless, at this week’s meetings, I expect the dot plot to show between 1 and 2 cuts, with a few FOMC members choosing no cuts,” Siegel stated.

Later in the week are also the May Producer Price Index figures import and export prices, and the initial release of the University of Michigan’s Consumer Sentiment Survey.

The Uncertainty Index reached a nearly four-year high on the day of the National Federation of Independent Business survey despite small business confidence and hiring plans reaching their highest points of the year in May. The survey was conducted in advance of the U.S. presidential election.

The Dow e-mini was down 134 points or 0.34%, the S&P 500 e-mini was down 13.75 points, or 0.26% and the Nasdaq 100 e-mini was down 51.5 points, or 0.27%, at 5:54 a.m. ET.

Cryptocurrency-related stocks fell as the price of bitcoin fell 3.6%, down more than 3% for bitcoin exchange Coinbase miners Riot Platforms and Marathon Digital.

Eli Lilly had a 3.0% rise when an FDA panel unanimously authorized its Alzheimer’s medicine donanemab

Following the signing of terms to obtain around $24 million in finance under the US CHIPS Act to expand the production of semiconductors that power spacecraft, Rocket Labs USA’s stock price increased by 0.9%.



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