Traders on the floor of the New York Stock Exchange are gearing up for a potentially pivotal day as S&P 500 futures rose slightly on Tuesday. Investors are eagerly awaiting the release of the February consumer price index report, which could have significant implications for the Federal Reserve’s monetary policy.
According to sources from the NYSE, S&P 500 futures inched up 0.1%, with Nasdaq-100 futures also gaining about 0.4%. Meanwhile, futures on the Dow Jones Industrial Average remained relatively flat. The upcoming CPI report, scheduled for release at 8:30 a.m. ET, is expected to show a monthly gain of 0.4% and a 3.1% year-over-year increase on headline.
The previous uptick in January’s CPI figure had a noticeable impact on the markets, prompting Fed officials to adjust their stance on policy easing. As a result, current market pricing suggests that the Fed is unlikely to cut interest rates at its upcoming meetings in March and April.
Bill Adams, chief economist at Comerica Bank, anticipates that the February CPI index may have been influenced by higher gasoline prices, but core inflation likely slowed due to decreases in car prices and moderated rent increases.
The recent slowdown in the technology-led market rally has also been a cause for concern, with some of the biggest winners of the year experiencing setbacks. Nvidia, one of the “Magnificent Seven,” saw a 2% drop on Monday following a more than 5% decline on Friday. Other members of the group, including Apple, Alphabet, Microsoft, and Tesla, have also experienced losses in the past month.
Mark Hackett, Nationwide’s chief of investment research, suggests that as the market moves beyond mega-cap tech names, investors may see more consolidation and modest returns in the high-level market-based indexes. With all eyes on the upcoming CPI report, traders are bracing themselves for potential market shifts in response to the latest inflation data.
