(Reuters) – U.S. stock index futures fell on Wednesday as investors awaited key economic data, including a crucial inflation report, which is expected to influence the Federal Reserve’s future monetary policy.
The report on personal consumption expenditure, the central bank’s favorite inflation data, is due at 10 a.m. ET. Economists polled by Reuters expect prices to rise 2.3% annually in October, higher than the previous month’s 2.1% gain and above the Fed’s 2% target.
Minutes from the Fed’s meeting earlier this month showed policymakers were uncertain about the prospects for rate cuts and the extent to which current interest rates were constraining the economy.
Traders expect a 66.3% probability that the central bank will cut borrowing costs by 25 basis points in December, according to CME Group’s FedWatch Tool. They are also pricing in a rate cut of roughly 75 basis points by the end of 2025, down from about 250 basis points in September, according to data compiled by LSEG.
Much of the concern has been that newly elected President Donald Trump’s proposed tax cuts and tariff policies, including his latest stance on imports from Mexico, Canada and China, could drive up prices, spark a trade war and could depress global growth.
Economists at Deutsche Bank predict such rates could lift U.S. core PCE inflation from 2.6% to 3.7% by 2025 if fully implemented. Before Trump’s victory, inflation of 2.3% was expected next year.
At 5:37 a.m. ET, the Dow E-minis were up 34 points, or 0.08%, the S&P 500 E-minis were up 10 points, or 0.17%, and the Nasdaq 100 E-minis were up 68 .25 points, or 0.33%.
Futures tracking small caps rose 0.4%. Stock prices have risen this year, with Wall Street’s major indices and the small-cap Russell index hitting near-record highs.
The benchmark S&P 500 is on track for its biggest one-month gain in a year and poised for its sixth month of gains in seven, as markets assess the likelihood that Trump’s policies would benefit local businesses and the economy as a whole can come.
Investors will also keep an eye on the second estimate for third-quarter gross domestic product, weekly jobless claims data and October durable goods data before the market opens, all due at 8:30 a.m. ET.
Global nervousness prevailed as Chinese state media warned that Trump’s policy pledges earlier this week could drag the world’s two largest economies into a mutually destructive tariff war.
Among the top gainers, Dell fell 12.7% after issuing a weak quarterly revenue forecast and HP fell 9% after a dismal first-quarter profit forecast, pointing to weak demand in the PC market.
