By Investing.com– U.S. stock index futures rose slightly on Tuesday evening as caution grew ahead of key consumer inflation data that is likely to factor into the Federal Reserve’s outlook on interest rates.
Futures were muted after a choppy session on Wall Street, as softer than expected producer inflation data provided only limited relief over a hawkish outlook for interest rates.
Investors were also cautious before a string of major bank earnings on Wednesday.
S&P 500 Futures rose 0.1% to 5,886.25 points, while Nasdaq 100 Futures rose 0.1% to 20,949.50 points by 18:38 ET (23:38 GMT). Dow Jones Futures rose 0.1% to 42,792.0 points.
Among individual movers, Tesla Inc (NASDAQ:TSLA) fell 0.4% after the Securities and Exchange Commission sued CEO Elon Musk for failing to disclose a substantial stake in Twitter during his purchase of the social media firm.
CPI data awaited for more rate cues
Focus was now squarely on upcoming consumer price index inflation data, which is expected to provide more insight into the Fed’s plans for interest rates.
The reading is due at 08:30 ET (13:30 GMT), and is widely expected to show inflation remained sticky in December.
Sticky inflation gives the Fed less impetus to cut interest rates, with the bank having warned as much during its December meeting.
Markets are positioning for a much slower pace of interest rate cuts in 2025- a trend that could bode poorly for risk-driven assets. Wall Street indexes had slumped through late-2024 on this notion.
PPI data offers limited relief
Producer price index inflation data released on Tuesday read softer than expected for December. But the print provided little relief to markets, given that some measures of inflation, which also factor into PCE price index data, remained high. PCE data is the Fed’s preferred inflation gauge, and is due later in the month.
On the inflation front, markets were also on edge over incoming President Donald Trump, who will take office from January 20. Fed officials recently expressed concerns that Trump’s plans for hefty trade tariffs will underpin inflation, keeping rates higher in the long term.
A Bloomberg report showed this week that Trump’s team was also considering a more staggered approach to tariffs.
Wall St nurses weak start to 2025; earnings awaited
Wall Street indexes marked a chippy session on Tuesday amid persistent weakness in technology stocks. They were also nursing a weak start to the year after tumbling from record highs through December.
The S&P 500 rose 0.1% to 5,842.86 points on Tuesday, while the NASDAQ Composite fell 0.2% to 19,044.39 points. The Dow Jones Industrial Average rose 0.5% to 42,518.28 points.
Focus this week is also on a string of key bank earnings. Prints from JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Goldman Sachs Group Inc (NYSE:GS), and Citigroup Inc (NYSE:C) are due on Wednesday.
