Powell waited as US stock futures remained stable as rate-cut bets increased following CPI data

U.S. stock index futures held steady during Wednesday evening trading after consumer inflation data met expectations, bolstering speculation for a December interest rate cut. Traders are now focusing on an upcoming address by Federal Reserve Chair Jerome Powell for further guidance.

The stabilization in futures followed a relatively subdued session on Wall Street, with key U.S. indices settling into a narrow range. This comes as a previous risk-on rally sparked by Donald Trump’s election win shows signs of easing.

Wednesday's consumer price index (CPI) data matched expectations but highlighted persistent inflationary pressures. This raised uncertainty about the extent to which the Fed may continue its current rate-cutting path.

As of 7:19 p.m. ET (11:19 GMT), S&P 500 futures remained flat at 6,0126.50 points, Nasdaq 100 futures dipped slightly to 21,148.25 points, and Dow Jones futures were unchanged at 44,122.0 points.

CPI Data Spurs Bets on December Rate Cut; Powell Speech Eyed
Following the CPI release, market bets for a December interest rate cut rose substantially. Traders now see an 85.3% probability of a 25 basis point reduction next month, up from a 60.2% likelihood earlier in the week, according to CME FedWatch. The chances of a pause were pegged at 14.7%.

Despite the in-line CPI data, the persistence of inflation—demonstrated by year-on-year increases in the headline rate and core inflation staying above 3%—added to long-term uncertainty surrounding rates and inflation.

This inflation backdrop emerged amid expectations of further expansionary measures from the Trump administration, which could impact long-term rates and inflation.

Attention now shifts to Fed Chair Powell's speech on Thursday evening for additional insights on monetary policy. Powell reiterated the Fed's data-driven approach to rate decisions last week after announcing a 25 basis point cut.

Wall Street Pauses as Trump-Driven Rally Cools; Yields Rise
On Wednesday, Wall Street indexes delivered a mixed performance, pulling back slightly from record highs seen earlier in the week. Investors are waiting for more clarity on President Trump’s policy plans. On Tuesday, Trump announced the creation of a new department to streamline government agencies, to be led by Elon Musk and Vivek Ramaswamy, although market reaction was limited.

The S&P 500 ended flat at 5,985.38 points, while the Dow Jones Industrial Average inched up 0.1% to 43,958.19 points. The Nasdaq Composite declined by 0.2% to 19,236.22 points.

Recent market pressure has also been driven by a sharp uptick in Treasury yields following Trump’s victory.

 

 

 

 

 

 

 

 

 

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