tl;dr
Nasdaq, S&P, and Dow futures inched up slightly on Wednesday, while yields were unchanged, as investors braced for the key inflation data that could guide the Federal Reserve's policies on interest rates. S&P 500 futures (SPX) 0.1%, Dow futures (INDU) 0.2%, and Nasdaq 100 futures (NDX:IND) were un...
Nasdaq, S&P, and Dow futures inched up slightly on Wednesday, while yields were unchanged, as investors braced for the key inflation data that could guide the Federal Reserve's policies on interest rates. S&P 500 futures (SPX) 0.1%, Dow futures (INDU) 0.2%, and Nasdaq 100 futures (NDX:IND) were unchanged. "US CPI data is the biggest piece of market-moving data each month. Perhaps that is no surprise given the pandemic, the Ukraine war inflation shock and, thankfully, strong signs of disinflation which emerged globally through the second half of 2023," ING Economics said. If the potentially market-moving consumer price index data comes hotter than expected, the Fed could hold off cutting rates for now. The odds of the Fed slashing rates in June has now fallen to ~51%, according to the CME's FedWatch tool. The consumer price index for March is expected to hit before the bell and is predicted to rise 0.3% for the month, with the annual rate rising to 3.4%. The core CPI is also seen up 0.3%, with the annual rate falling to 3.7%. The CPI print will be heavily in focus after the last two prints came in strongly, said Deutsche Bank's Henry Allen. "But today’s print will be crucial as if there is a third strong reading, it would be increasingly difficult to explain that as just a temporary blip," Allen said. "Inflation is a complex subject (reasonably priced, widely available books could be written about it). Sadly, the world of hashtag economics reduces everything to a single data point (or at best, two). However, the details today really do matter," said UBS' Paul Donovan. A 0.2% print for the March core CPI is slightly more likely than the 0.3% anticipated by most other forecasters, said Pantheon Macroeconomics, adding "It’s not nailed-on, but if we’re right the market-implied probability of a June FOMC rate cut will rebound, having dipped to 48%, from 60% a week ago" The 10-year Treasury yield (US10Y) was unchanged at 4.36%. The 2-year yield (US2Y) was flat at 4.75%. Apart from the inflation report, the FOMC meeting minutes will also be out today at 2:00 pm ET.
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