Futures for US stocks decline as the Trump trade stalls before CPI data

U.S. stock index futures declined in Tuesday evening trading, as Wall Street's rally following Donald Trump’s election victory cooled amid caution ahead of critical inflation data.

Investor sentiment took a hit after hawkish remarks from Federal Reserve officials, who cautioned that any inflation uptick could lead to a pause on interest rate adjustments.

The decline in futures followed a pullback in major Wall Street indexes during Tuesday’s trading session. The S&P 500 Futures dipped 0.1% to 6,005.0 points, Nasdaq 100 Futures slipped 0.2% to 21,146.75 points, and Dow Jones Futures edged down 0.1% to 44,034.0 points by 18:38 ET (23:38 GMT).

Trump-Driven Rally Stalls as Inflation Data Nears
Profit-taking emerged as investors reevaluated gains spurred by Trump’s election win. The rally appeared to pause as market participants sought greater clarity on the direction of his second-term policies, particularly concerning trade and immigration, as Trump maintains a protectionist stance.

Concerns over potential long-term inflation growth under a Trump administration further added to investor caution ahead of a key consumer price index (CPI) inflation report due on Wednesday. This data is expected to show steady inflation in October, prompting questions over the Federal Reserve’s leeway for additional interest rate cuts.

Minneapolis Fed President Neel Kashkari noted on Tuesday that any unexpected inflation spikes could lead the Fed to maintain steady interest rates in December. His remarks prompted traders to assess a 59.8% probability that the Fed will lower rates by 25 basis points in December, versus a 40.2% likelihood of no change, according to CME’s FedWatch tool. Last week, the central bank cut rates by 25 basis points while reiterating its data-dependent stance on further easing.

Wall Street Slips from Record Highs
U.S. stock indexes retreated from record peaks on Tuesday as investors secured profits amid mounting caution ahead of the CPI report. The dollar and Treasury yields saw sharp gains, which also added pressure.

The S&P 500 declined 0.3% to 5,983.99 points, the NASDAQ Composite dropped 0.1% to 19,282.76 points, and the Dow Jones Industrial Average fell 0.9% to 43,910.98 points.

In post-market trading, Rivian Automotive Inc (NASDAQ: RIVN) surged over 8% after announcing an expanded joint venture investment with Volkswagen AG (ETR: VOWG). Meanwhile, Spotify Technology (NYSE: SPOT) gained 7% following robust subscriber growth in the September quarter and an upbeat annual forecast.

 

 

 

 

 

 

 

 

Paraphrasing text from "Investing" all rights reserved by the original author.