Anika Begay
(Reuters) – Futures tied to the benchmark index were trading at a standstill on Wednesday after the benchmark posted four straight days of gains, as investors cautiously awaited a key inflation report for clues on the pace of interest rate cuts by the Federal Reserve.
were down 0.1% as Alphabet (NASDAQ:) fell 1.3% in pre-market trading. A media report said the U.S. Department of Justice is considering options that include splitting up Google.
The rally in large-cap and technology stocks has helped markets recoup much of the losses suffered since the global market crash earlier this month, triggered in part by data showing the U.S. unemployment rate rose in July.
Market attention now turns to the July reading of the U.S. Consumer Price Index (CPI), due at 8:30 a.m. ET, which is expected to show headline inflation rising 3% year-over-year, the same as in June.
The data follows weaker-than-expected producer price data released on Tuesday that indicated inflation was continuing to moderate, though it has yet to reach the U.S. central bank’s 2% target.
Atlanta Federal Reserve President Raphael Bostic said he wanted to see “a little more data” before he was ready to support lowering interest rates.
“In particular, inflation was below consensus forecasts from April to June, with prices and wages lower than economists had expected,” said Stefan Koopman, senior macroeconomic strategist at Rabobank.
“We expect the Fed to cut rates in September, primarily due to rising unemployment and as a precautionary measure against a potential recession.”
Markets generally expect the Fed to begin its monetary policy easing cycle at its Sept. 17-18 meeting, but are about evenly split on whether that will be a 25 basis point rate cut or a steeper 50 basis point cut.
As of 5:18 a.m., the Dow E-mini was up 50 points, or 0.13%, while the S&P 500 E-mini was virtually unchanged at 5,459.25 points.
The Cboe Volatility Index, Wall Street’s fear gauge, remained 20 points below its long-term average for a second day, settling at 18.37, after hitting its highest level since 2020 just last week.
Among other stocks, Kellanova jumped 7% in pre-market trading after a source told Reuters that candy giant Mars is close to a deal to acquire the maker of snacks such as Cheez-It and Pringles for nearly $30 billion.
