(Reuters) – U.S. stock index futures edged lower on Tuesday, heading for a quiet session as investors looked ahead to crucial inflation data and a Federal Reserve policy announcement on Wednesday.
The S&P 500 and Nasdaq hit record highs in a choppy session on Monday, boosted by Nvidia shares after its 10-for-one stock split.
Nvidia was flat in premarket trading, while Apple shares lost 0.7% after investors were unimpressed by its highly anticipated AI strategy presented at its developers conference on Monday.
Markets are gearing up for the release of the Consumer Price Index report for May on Wednesday, along with the conclusion of the Fed’s two-day policy meeting. The central bank is not expected to change interest rates, but will publish its updated economic projections and dot plot.
The CPI numbers and the Fed’s projections will be closely watched by investors, as recent reports have given conflicting signals about the underlying health of the economy.
According to the CME’s FedWatch tool, markets are pricing in a just over 50% chance that the Fed’s first rate cut will occur in September.
“Lower commodity prices, coupled with possible adjustments in rental index calculations, could lead to more favorable inflation data in the coming months. This improvement would be a positive development for markets and should influence the Federal Reserve’s interest rate decisions,” Jeremy Siegel, senior economist at WisdomTree, said in a note.
“Nevertheless, at this week’s meetings I expect the dot graph to show between 1 and 2 cuts, with a few FOMC members choosing not to make cuts,” Siegel said.
Producer Price Index data for May, import and export prices and the first release of the University of Michigan Consumer Sentiment Survey will also be released later this week.
A National Federation of Independent Business survey found that small business confidence and hiring plans rose to the highest level of the year in May, but the upcoming U.S. presidential election pushed the uncertainty index to its highest point in almost four years.
At 5:54 a.m. ET, the Dow e-minis were down 134 points, or 0.34%, the S&P 500 e-minis were down 13.75 points, or 0.26%, and the Nasdaq 100 e-minis were down 51 .5 points, or 0.27%.
Cryptocurrency-linked stocks fell as bitcoin fell 3.6%, while bitcoin miners Riot Platforms and Marathon Digital and crypto exchange Coinbase all fell more than 3%.
Drugmaker Eli Lilly rose 3.0% after its Alzheimer’s drug donanemab received unanimous support from an FDA panel.
Rocket Labs USA gained 0.9% after the company signed terms to receive nearly $24 million in funding under the U.S. CHIPS Act to expand production of semiconductors for spacecraft.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)
