U.S. Stock Index Futures Reflect Cautious Trading Ahead of December Inflation Report

by Warren Seah

As the market looks ahead to the release of the December inflation report on Thursday, U.S. stock index futures displayed mixed performance early on Wednesday.

How are stock-index futures trading?

  • S&P 500 futures (ES00) rose 6 points, or 0.1%, reaching 4799.
  • Dow Jones Industrial Average futures (YM00) fell 4 points, or 0%, to 37759.
  • Nasdaq-100 futures (NQ00) gained 62 points, or 0.4%, climbing to 16892.

On Tuesday, the Dow Jones Industrial Average (DJIA) experienced a decline of 158 points, or 0.42%, closing at 37525. The S&P 500 (SPX) also saw a decline of 7 points, or 0.15%, finishing at 4757. Meanwhile, the Nasdaq Composite (COMP) managed to gain 14 points, or 0.09%, closing at 14858.

Investors continue to closely monitor inflation and its impact on bond markets and the Federal Reserve’s monetary policy trajectory. However, their attention will temporarily shift to the upcoming fourth-quarter 2023 earnings season, which will kick off with major banks on Friday.

The S&P 500 currently stands just 40 points, or 0.8%, below its record high of 4796.6 observed over two years ago. This surge in recent months is primarily driven by the hope that easing inflation will lead the Federal Reserve to lower interest rates in 2024. As evidence of this easing trend, ten-year Treasury yields (BX:TMUBMUSD10Y), which serve as the benchmark for borrowing costs, have dropped from 5% in October to their current level of 4.003%.

For this optimistic outlook to materialize, inflation must continue to decrease and align with the central bank’s target of 2%. Therefore, the release of the consumer price index for December holds great importance. The data is scheduled to be published at 8:30 a.m. Eastern on Thursday.

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