(Reuters) – U.S. stock index futures traded flat to slightly higher on Wednesday as investors awaited a crucial inflation report and the conclusion of the Federal Reserve’s policy meeting.
Markets have been generally cautious this week, looking for clearer signals about the likely policy path, although a rise in Apple shares helped the S&P 500 and Nasdaq reach record highs for the second straight session on Tuesday.
Shares of Apple fell 0.7% in premarket trading. The tech giant had surged more than 7% to a record high in the previous session as investors cheered the newly launched AI features on its devices.
With a market cap of $3.18 trillion as of Tuesday’s close – just behind Microsoft – this latest spurt meant Apple firmly took its place ahead of AI chip powerhouse Nvidia’s $2.97 trillion in the race for pole position as ‘s the world’s most valuable company.
The Consumer Price Index report for May is due at 8:30 AM ET, while the Fed’s policy announcement is due at 2:00 PM ET.
“Today’s CPI (and) the Fed meeting beyond is so highly anticipated that a lot is riding on them… and we may be too late for a small correction,” said David Morrison, senior market analyst at Trade Nation . .
Core inflation in May is expected to remain stable at 0.3% this month and decline to 3.5% year-on-year. The overall monthly CPI is expected to decline from 0.3% to 0.1%.
“I think the market will be extremely happy if the numbers come out as expected as it is still something of a bull market,” Morrison said.
With interest rates expected to remain largely unchanged, markets will focus primarily on the central bank’s updated Summary of Economic Projections, particularly the dot plot, which shows where policymakers expect interest rate levels to be this year and will remain in place in the long term.
While Wall Street has rebounded in recent months, much of these gains have come from mega-cap growth stocks and technology advances, leaving some market participants concerned about the sustainability of stock strength, especially if the Fed proves to be more aggressive.
While the S&P 500 technology index hit a record high in the latest session, nine of the 11 major sectors were in the red, while the small-cap Russell 2000 fell 0.4%.
According to the CME’s FedWatch tool, markets now see a lower chance of a first Fed rate cut in September, pricing in a chance of just over 50%.
At 5:25 a.m. ET, the Dow e-minis were up 17 points, or 0.04%, the S&P 500 e-minis were up 4.75 points, or 0.09%, and the Nasdaq 100 e-minis were up 22.75 points, or 0.12%.
Among single movers, Oracle gained 8.9% after forecasting double-digit revenue for fiscal 2025 after Tuesday’s bell.
Paramount Global fell 2.3% after Shari Redstone, its largest shareholder, ended talks on a possible merger with David Ellison’s Skydance Media, sources said.
Electric vehicle maker Nio’s US stock fell 3.5% after a report that the European Commission will impose additional duties on imported Chinese electric vehicles.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)
