Stock Futures Tick Higher, Treasurys Strengthen Ahead of Inflation Data

Dow Jones
10/14
 
 

U.S. stock futures nudged higher and Treasury yields slipped as investors positioned ahead of key inflation data Wednesday.

Consumer-price inflation data for September will help shape investor expectations for the Federal Reserve's next policy meeting in two weeks. Markets price a 78% probability that the Fed will hold rates pat in October and an 88% probability for a December hike, according to LSEG. Economists surveyed by the Wall Street Journal expect annual inflation to increase to 3.6% for September, up from 3.4% in August.

"Today's CPI report [is] the immediate arbiter of whether the recent easing in market rate expectations can hold," said Tickmill Group strategist Patrick Munnelly.

Treasury yields pulled back ahead of the print, with 10-year yields dropping 1.9 basis points to 5.198%, while 30-year yields fell 1.3 basis points to 5.550%.

Futures for the Dow Jones Industrial Average added 0.25% and S&P 500 futures inched up 0.2%. Nasdaq futures were 0.2% higher, though chip stocks were mixed in premarket trade following a six-day fall in semiconductor stocks.

AI-linked stocks were on firmer ground in Europe. ASML--Europe's most valuable company--raised its guidance again on surging demand, lifting AI stocks on the continent. In Asia, tech stocks turned negative after gaining earlier in the day. South Korea's Kospi index ended down 0.4%, while Japan's Nikkei 225 edged 0.05% lower.

Oil prices were steady despite Houthi attacks on a Saudi Aramco administrative building Tuesday and after the International Energy Agency forecast a sharp fall in demand. Front-month Brent crude contracts for December delivery edged 0.2% lower to $105.50 a barrel.

Lower Treasury yields prompted a fall in the dollar and supported a rise in bitcoin, which rose 0.86% to $83,900. New York gold contracts dropped 0.2%, back below $4,200 a troy ounce.

Inflation data will be in focus Wednesday, while European Central Bank president Christine Lagarde is set to speak. AI investors attention will turn to Anthropic's expected pre-public offering investor day, at which the company is set to disclose its third-quarter earnings, CNBC reported. In public markets, Bank of America, Morgan Stanley and BlackRock are all set to report earnings.

 
 

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