(Reuters) – U.S. stock index futures fell on Wednesday, as investors priced in a greater chance of Democrat Kamala Harris winning the upcoming presidential election, while focus shifted to a key inflation reading later in the day.
Investors have been adjusting their expectations for next week’s Federal Reserve policy meeting for weeks, and inflation data could help. But analysts said the U.S. presidential debate, in which Harris put Republican rival Donald Trump on the defensive late Tuesday, was the driving force behind sentiment.
Wall Street remained jittery as the debate offered investors little clarity on key policy issues, even as betting markets swung in Harris’ favor after the event.
“For Trump, we see Harris’ policies as less fiscally expansionary and less focused on tax cuts,” said Mohit Kumar, chief economist at Jefferies.
After the debate, the price for a Trump win fell 6 cents to 47 cents on online betting site PredictIt, while it rose to 57 cents from 53 cents for a Harris win.
Shares of Trump Media & Technology Group, the media company owned by Trump, fell 15.2% in premarket trading.
U.S. government bond yields fell across the curve, with the 10-year yield settling at 3.6068%, its lowest level in more than a year.
Other traditional safe-haven assets such as the Japanese yen and the Swiss franc also rose, while the dollar index came under pressure.
Later today, attention will focus on the August consumer price inflation reading, with headline inflation expected to ease to 2.6% year-on-year, while the “core” figure, which excludes volatile components such as food and energy, is expected to remain unchanged at 3.2% year-on-year.
The producer price report is due on Thursday.
Traders seem confident that the Federal Reserve will cut interest rates when it meets on Sept. 17-18, with a 67% bias toward a 25 basis point cut, according to the CME’s FedWatch tool.
The S&P 500 and Nasdaq closed higher in volatile trading on Tuesday, while the Dow Jones ended lower as major banks such as Goldman Sachs suffered losses.
At 5:22 a.m. ET, the Dow E-minis were down 186 points, or 0.46%, the S&P 500 E-minis were down 20.75 points, or 0.38%, and the Nasdaq 100 E-minis were down 80.75 points, or 0.42%.
Among other stocks, GameStop fell 10.8% after the video game retailer, which has been at the center of the meme stock buying spree, said it had filed an offering request for up to 20 million shares and reported lower second-quarter revenue.
Cryptocurrency and blockchain-related stocks fell, with Bitcoin, the world’s largest cryptocurrency, falling more than 1%.
Shares of cryptocurrency exchange Coinbase Global fell 2.7%, software company MicroStrategy fell 3.9%, and cryptocurrency mining company Riot Platforms fell 2.1%.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Shonak Dasgupta)