US Futures Tiptoe Up Before CPI, Fed Double Penalized

U.S. stock futures rose Wednesday ahead of an important day for the U.S. economy that will provide the latest snapshot of the state of inflation and the latest signal on where interest rates are moving.

S&P 500 futures (ES=F) built their 27th record close of the year, up 0.1%. Futures on the tech-heavy Nasdaq 100 (NQ=F) rose 0.2%, also pointing to gains after a record close for the index. Dow Jones Industrial Average (YM=F) futures gained 0.1%.

Wall Street expects a double on Wednesday, with the latest consumer price reading at 8:30 a.m. ET. In the afternoon, the Federal Reserve will unveil its latest interest rate decision.

The pace of inflation is expected to have slowed last month after stronger-than-expected surprises in the first half of 2024. The consumer price index is expected to show headline inflation of 3.4%, which would match that of April, according to Bloomberg estimates. . On a “core” basis, which excludes groceries and gasoline, prices in May are expected to have increased 3.5% from last year, a slight slowdown from April.

Learn more: How does the labor market affect inflation?

Meanwhile, the Fed’s decision is almost certain: the central bank is expected to keep rates at their current 23-year levels. Investors will be paying closer attention to the release of the Fed’s updated economic projections in its dot plot – particularly the number of rate cuts it projects for the rest of the year.

The last time we heard it, in March, it was three o’clock. Policymakers are almost certain to reduce that amount, thanks in part to the aforementioned sticky inflation that will begin this year. These projections, along with what Fed Chairman Jerome Powell said during his press conference, could be the last notable events for the market on an extraordinarily busy day.

In the corporate sector, Apple (AAPL) shares cooled after hitting a record high on Tuesday. Shares fell 0.4% premarket.

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