U.S. stock futures were pointing to a mixed start, with technology stocks set to come under pressure on Wednesday as investors waited for important consumer price data expected ahead of Wall Street’s open.
How are markets trading?
Dow Jones Industrial Average futures
rose 2 points to 4,423
S&P 500 futures
were down 0.1% at 35,157
fell 0.4% to 14,985
On Tuesday, the Dow
rose 162.82 points, or 0.5%, to close at 35,264.67, the S&P 500
gained 4.40 points, or 0.1%, to end at 4,436.74, with the Nasdaq Composite
moving the other way, closing down 72.09 points, or 0.5%, to 14,788.09.
What’s driving markets?
The Dow and S&P 500 each logged record closes on Tuesday, as investors looked past worries surrounding economic growth and the fast-spreading delta variant of coronavirus. They instead cheered news that the Senate passed a $1 trillion infrastructure bill, sending it to the House of Representatives for its approval.
But attention on Wednesday will be fully focused on the July consumer price index, which economists are expecting to rise 0.5%, keeping the yearly rate above 5%. Every major inflation barometer of inflation has soared this year, with consumer prices in the lead. Up 5.4% in the past year, the cost of living, as measured by the CPI, has seen its biggest rise in 13 years.
A hotter-than-expected reading on CPI “should create meaningful policy concern,” Michael O’Rourke, chief market strategist at JonesTrading, told clients in a note.
“At that point, the market should start to recognize the FOMC [Federal Open Market Committee] is well behind the curve and the pressure to pull those Q1 2022 tapering expectations into Q4 2021 will ramp up quickly. Yields should then resume their ascent,” said O’Rourke.
He pointed to other forecasts showing the annual rate dipping to 4.3%, though he expects the data will fall short of that due to tougher comparables.
On the other hand, a weak reading could push markets to new highs on hopes tapering would be pushed back, say some observers.
The yield on the 10-year government bond
was up 3 basis points to 1,3639% early Wednesday. Anticipation of the data was keeping European
and Asian markets on the sidelines.
Which companies are in focus?
Shares of Coinbase
rose 3% in premarket trading. In its first report as a public company, the cryptocurrency platform reported sales and profit that beat forecasts, though also a tepid third-quarter outlook.