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 rose marginally on Wednesday morning 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 44 points, or 0.1%. S&P 500 futures traded just above the flatline, while Nasdaq-100 futures were little changed.
The March reading on consumer price index is slated for release at 8:30 a.m. ET. Economists polled by Dow Jones expect an increase of 0.3% month over month and 3.4% year on year. 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.
