Investors are on edge as they await the release of key U.S. inflation data that will impact the Federal Reserve’s decision on interest rates. Stock futures were relatively flat Tuesday night, with the Dow Jones Industrial Average futures up 0.09%, S&P 500 futures up 0.08%, and Nasdaq 100 futures up 0.1%.
The market is eagerly anticipating the release of the March consumer price index report on Wednesday, which is expected to show a 0.3% increase from the previous month and a 3.4% increase from a year earlier. Economists also predict a 0.3% rise in core CPI, excluding food and energy prices.
Traders are closely watching the CPI data for clues on the Fed’s future rate policy, with Fed funds futures suggesting a 42% chance of no rate changes in June. A higher-than-expected inflation reading could trigger a market pullback, while a lower reading could boost equity markets.
Quincy Krosby, chief global strategist at LPL Financial, warned of the potential for stagflation if the Fed moves to ease rates without a decrease in inflation. Investors are also awaiting the release of the Fed’s meeting minutes from last month for insights on potential rate cuts this year.
In addition to the inflation report and Fed minutes, the first quarter earnings season is set to begin, with Delta Air Lines scheduled to report results on Wednesday morning. The combination of these factors is likely to drive market movements in the coming days.
