Market Snapshot: U.S. stock futures climb as investors await December inflation report

by | Jan 12, 2023 | Stock Market

U.S. stock futures traded modestly higher on Thursday as a closely watched report on inflationary pressures loomed. How are stock-index futures trading
S&P 500 futures
gained 16 points, or 0.4%, to 4,006.

Dow Jones Industrial Average futures
gained 126 points, 0.4%, to 34,236.

Nasdaq 100 futures
rose 38 points, or 0.3%, to 11,514.

On Wednesday, the Dow Jones Industrial Average
rose 269 points, or 0.8%, to 33973, the S&P 500
increased 50 points, or 1.28%, to 3970, and the Nasdaq Composite
gained 189 points, or 1.76%, to 10932.

The Nasdaq Composite is up 4.4% already this year but remains down 31.9% from its record high.What’s driving markets Stock futures trended higher Thursday as traders awaited the release of the U.S. consumer price index report for December, due at 8:30 a.m. Eastern. Inflation reports have been among the most consequential data releases for markets, with some of the biggest intraday swings of 2022 occurring on inflation days. The S&P 500 has gained 3.4% already in 2023, partly on investor hopes that CPI inflation — which hit a four decade high of 9.1% in June and which by November had dropped to 7.1% — will continue to decline, allowing the Federal Reserve to trim interest rates later this year. “Building optimism about the inflation outlook…[has driven] a significant rally in sovereign bonds, providing a less volatile rates environment and allowing risk to thrive,” said Stephen Innes, managing partner at SPI Asset Management. Economists forecast that headline CPI will have shown a rise of 6.5% from a year ago and that core CPI, which strips out more volatile items like energy and food, will have climbed 5.7%, down from 6% in November. On a month-on-month basis headline CPI is expected to have dipped 0.1 and core to have risen 0.3%. See: Inflation is slowing, CPI to show. But is it slowing fast enough for the Fed? The report “could be a make-or-break moment for the market sentiment,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Overall, a data set in line with the soft expectations, or ideally softer, should further boost the Fed doves, increase the bets of a 25bp hike in February, pull the Treasury yields and the U.S. dollar further down and give a further boost to equities. If, however, the CPI print is higher than expected…then we could see a sharp repricing in favour of a 50bp at the next FOMC meeting,” she added. Other U.S. economic data on the cards Thursday include the weekly initial jobless claims. There will also be a batch of Fed officials making comments, with Philadelphia Fed President Patrick Harker at 8:45 a.m., St. Louis Fed President James Bullard at 11:30 a.m., and Richmond Fed President Tom Barkin at 12:40 p.m. all speaking. Though inflation is clearly the focus for Thursday, investors are also aware that the fourth-quarter corporate earnings season kicks into gear on Friday, with big banks, including JPMorg …

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