US pre-open: Futures lower ahead of August CPI reading

11th Sep 2024 10:58

(Sharecast News) - Wall Street futures were in the red ahead of the bell on Wednesday as market participants prepped for last month's consumer inflation report.

As of 1230 BST, Dow Jones futures were down 0.37%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.25% and 0.27% weaker, respectively.

The Dow closed 92.63 points lower on Tuesday, taking a bite out of gains recorded in the previous session.

Wednesday's main event will be August's consumer price index at 1330 BST, with economists expecting to see headline CPI rise 0.2% month-on-month and 2.6% year-on-year. Last month's CPI reading could help traders figure out just how big of a rate cut to expect from the Federal Reserve at the end of its two-day policy meeting on 18 September.

Trade Nation's David Morrison said: "There's an air of caution and uncertainty hovering over the markets. While some of this is due to today's upcoming CPI release, it's also fair to say that investors have been rattled by last week's sell-off, particularly as it followed on from the panicky slump at the beginning of August. Poor readings from the labour market have raised fears that the Fed has kept interest rates too high for too long, and that this could result in a hard landing for the economy.

"Any softening in the labour market should be welcome (to a degree) as the Fed had repeatedly warned that the historically low unemployment rate risked a rebound in inflation should wage demands pick up. That is now less of an issue. However, the markets are now focusing on the Fed's other half of its dual mandate, maximising employment, rather than maintaining price stability by bringing inflation under control. So, incoming data on this is likely to be the major factor in forecasting the size and timing of future rate cuts."

Elsewhere on the macro front, mortgage applications rose 1.4% in the week ended 6 September, according to the Mortgage Bankers Association of America, following a 1.6% increase in the previous week. Applications to purchase a home were up 2%, while refinance applications rose 1%.

In the corporate space, GameStop shares sunk in pre-market trading after the video game retailer amended an open market sale agreement filed with the Securities and Exchange Commission.

Reporting by Iain Gilbert at Sharecast.com