Investing.com — U.S. stock index futures were slightly lower in overnight trade on Wednesday, as investors braced for key consumer inflation data likely to weigh on interest rate expectations.
Futures settled after a positive session on Wall Street, with the Dow Jones hitting record highs after minutes from the Federal Reserve’s September meeting showed a large number of policymakers backed a 50 basis point cut.
But the minutes also showed that policymakers were not committed to any particular pace of cuts going forward, leaving investors nervous about how much interest rates would fall this year.
It settled at 5840.0 points, while it settled at 20457.25 points by 19:17 ET (23:17 GMT). It settled at 42,830.0 points.
CPI data Awaiting further price signals
The focus is now squarely on data scheduled for release on Thursday, for further signals on inflation and interest rates.
The reading is expected to show a slight decline in CPI inflation, while the core CPI – which excludes volatile food and energy prices – is expected to remain flat. Steady inflation gives the Fed less impetus to cut interest rates at a rapid pace.
This idea was reinforced by strong payrolls data released last week, which killed bets on another 50 basis point cut in November.
Traders were expecting a 75.5% chance of a 25 basis point cut, and a 24.5% chance of a suspension in November.
However, strength in the labor market and steady inflation indicate some resilience in the US economy, reducing the odds of a recession in the coming months. This idea was supported by Wall Street, where economically sensitive sectors posted strong gains.
The index rose 0.7% to 5,792.04 points on Wednesday, while it rose 1% to 42,512.0 points, a record high closing level. It rose 0.6% to 18,291.82 points.
The third quarter earnings season is set to begin
The focus this week is also on the third-quarter earnings season, with a series of major banks scheduled to report on Friday.
JPMorgan Chase & Co. (NYSE:), Wells Fargo & Company (NYSE:) and Bank of New York Mellon (NYSE:) are scheduled to report third-quarter earnings on Friday, while… Goldman Sachs Group Inc (NYSE:), Bank of America Corp (NYSE:), and Citigroup Inc (NYSE:) will report earnings next week.
Johnson & Johnson (NYSE:), Unitedhealth Group (NYSE:) and Walgreens Boots Alliance Inc (NASDAQ:) are also scheduled to report earnings early next week.
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