U.S. stock futures were little changed on Wednesday as investors braced for a consumer inflation report that sets the stage for the Federal Reserve’s final interest rate decision of the year.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 futures (ES=F) both fluctuated along the flat line. Contracts on the tech-heavy Nasdaq 100 (NQ=F) added about 0.2%.
Caution appears to be the key word ahead of the release of the November Consumer Price Index update, which will shed light on inflation and the economy. Markets were in a lull this week, with stocks falling from record highs as investors counted down the potential catalyst.
Wall Street heads into CPI day confident the outcome won’t stop the Fed from cutting rates by a quarter of a percentage point at its meeting next week. The report, which will be released at 8:30 a.m. ET, is expected to show headline inflation of 2.7% and an annual rate of 3.3% for “core” inflation, which excludes the cost of food and gas outside be taken into consideration.
But investors are on alert for any surprises as high stock valuations and the idea that a rate cut is a foregone conclusion could amplify any market reaction.
Earlier on Wednesday, a report that China is considering devaluing its currency sent ripples across global stock markets and boosted the dollar (DX=F). The possible move is seen as a response to higher tariffs promised by newly elected President Donald Trump, as a weaker yuan (CNHUSD=X) could make Chinese exports cheaper.
On the corporate front, Macy’s (M) stock fell 8% in pre-market trading after the department store chain cut its full-year earnings guidance. The retailer announced its third-quarter results after delaying the report while it investigated an employee who hid up to $154 million in expenses.
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