U.S. stock index futures were slightly lower in overnight trading Tuesday as focus shifted squarely to the upcoming inflation reading that is likely to weigh on interest rate cut expectations.
Eyes also focused on the first debate between Vice President Kamala Harris and former President Donald Trump, who are set to face off in a hotly contested presidential election in 2024. The debate is scheduled for later Tuesday evening.
Wall Street indexes have posted some gains over the past two sessions after uncertainty over the economy and interest rates caused sharp losses over the previous week.
The S&P 500 index fell 0.1% to 5,500.50 points, while it was down 0.1% at 18,850.50 points by 19:11 ET (23:11 GMT). It was down slightly at 40,782.0 points.
CPI data awaits more signals for rate cuts
Focus now turns to the inflation reading, due out on Wednesday, for further cues on interest rates.
The reading is expected to show inflation falling further, albeit slightly, in August, which could give the Federal Reserve more confidence to cut interest rates this year.
Wednesday’s CPI reading comes just a week before a monetary policy meeting, where the central bank is expected to cut interest rates by at least 25 basis points.
Uncertainty over a September rate cut has been a major drag on equity markets over the past week, with signs of resilience in the US economy prompting traders to scale back expectations for a larger 50 basis point cut in September.
Data showed that traders are pricing in a 70% chance that the Fed will cut rates by 25 basis points, and a 30% chance that it will cut them by 50 basis points.
Wall Street rises on tech, while financials, energy stocks stumble
Gains in technology stocks — amid some cheap buying and accumulation in the sector — helped most Wall Street indexes post a stronger close on Tuesday, though overall gains were still limited by losses in banking and energy stocks.
Oracle Corp. (NYSE:) helped drive gains in technology stocks after the company posted stronger-than-expected earnings and also announced a cloud partnership with Amazon.com Inc. (NASDAQ:).
Shares of major banks were flat in after-market trading after posting deep losses during the session, as JPMorgan Chase & Co. (NYSE:) issued a warning about net interest income on the back of the possibility of lower interest rates.
Energy stocks have been hit hard as oil prices have fallen to their lowest levels in more than three years on concerns about slowing demand.
The Dubai Financial Market General Index rose 0.5% to 5,495.52 points, while the Dubai Financial Market General Index rose 0.8% to 17,025.79 points, and the Dubai Financial Market General Index fell 0.2% to 40,736.96 points.
Harris vs Trump Debate Coming Soon
Markets are also awaiting the first presidential debate between Harris and Trump, which is scheduled to begin later on Tuesday.
Recent polls show the two candidates locked in a tight race to win the White House, with less than two months left until the vote.
The debate is scheduled to begin at 21:00 ET (03:00 GMT).