Futures Pause in Anticipation of Inflation Data

By Purvi Agarwal and Shashwat Chauhan

U.S. stock index futures showed little movement on Monday following record closing highs for the S&P 500 and Nasdaq from the previous session. These highs were fueled by hopeful corporate forecasts. Investors are now closely monitoring an important inflation report set to be released this week.

The Consumer Price Index (CPI) data scheduled for Wednesday is key as it comes just ahead of the Federal Reserve meeting on December 17-18. This report could significantly impact the Fed's future monetary policy decisions.

Anticipation for a 25-basis-point rate cut in December has surged to over 87%. This increase in expectations followed Friday's employment report, which revealed a robust job growth surge in November. However, the rise in the unemployment rate to 4.2% suggests a potential easing in the labor market.

Analysts at Jefferies noted, "We remain in the December rates cut camp and expect a 25bp cut next week." They also indicated that after the December meeting, the pace of rate cuts may slow down, potentially to once every quarter, with the next expected cut in March.

Citigroup has adjusted its outlook for the December rate cut, now predicting a 25-bps cut rather than the previously projected 50 bps.

Several Federal Reserve officials, including Chair Jerome Powell, indicated last week that the central bank could take a more cautious approach to monetary policy given the current economic resilience.

As of 7:13 a.m. ET, Dow E-minis were up by 1 point (0%), S&P 500 E-minis were down by 3.75 points (0.06%), and Nasdaq E-minis showed a decline of 38 points (0.18%).

Wall Street's major indexes started December positively, with gains noted in both the S&P 500 and the tech-heavy Nasdaq, while the Dow experienced a slight dip.

November saw a significant uptick in U.S. equities, driven by Donald Trump's presidential victory and a Republican sweep in Congress, which raised expectations for more business-friendly policies.

Global markets are also paying attention to emerging political situations in Syria, France, and South Korea.

In premarket trading, Workday and Apollo Global Management saw gains of 9% and 6.3%, respectively, due to their anticipated inclusion in the S&P 500.

Conversely, Nvidia faced a decline of 1.8% after Chinese regulators announced an investigation concerning possible violations of antitrust laws.

The Interpublic Group stock climbed by 14.6% following reports that Omnicom is in advanced discussions to acquire the advertising company, whereas Omnicom's shares dropped by 5.2%.

U.S.-listed shares of Chinese companies rose after indications from the Chinese Politburo regarding a shift toward looser monetary policies and proactive fiscal measures planned for the upcoming year. Notable gainers included Alibaba, up by 6.1%, PDD Holdings, gaining 9.1%, and Baidu, increasing by 5.3%.

Futures, Inflation, Stocks