U.S. Futures Largely Unchanged; CPI Data in Focus

© Reuters.

By Peter Nurse

AiVIF.com - U.S. stocks are seen opening largely unchanged, with investors cautiously awaiting the release of key U.S. inflation data, looking for clues about the monetary policy outlook.

At 7 AM ET (1100 GMT), the Dow Futures contract was up 15 points, or 0.1%, S&P 500 Futures traded 5 points, or 0.1%, higher, while Nasdaq 100 Futures climbed just 1 point, less than 0.1%.

The release of August consumer price inflation, at 8:30 AM ET (1230 GMT), is the highlight of the day’s economic calendar, with inflation seen as a key factor influencing the Federal Reserve's choice of when to scale back its monetary stimulus.

August consumer prices are expected to have risen by 5.3% year-on-year, a slight slowdown from July’s spike of 5.4%, which matched the largest jump since August 2008. This release could set the tone for markets ahead of next week’s Fed meeting, particularly if the rise is larger than expected.

The broad-based S&P 500 and the blue chip Dow Jones Industrial Average closed higher on Monday, for the first time in six sessions, helped by the news that the 7-day average of Covid-19 cases dropped to 136,000 through Friday, down from 157,000 new cases at the end of August.

That said, despite those gains, investors are turning bearish on the global economy, according to Bank of America’s monthly fund manager survey for September.

Economic growth expectations are now at a net 13%, the lowest since April 2020 and markedly down from a 91% peak in March this year, with the spread of the delta variant pf Covid-19 cited as the main reason for the increase in pessimism.

In corporate news, Apple (NASDAQ:AAPL) will be in the spotlight Tuesday, with the world’s largest company expected to announce new versions of the iPhone, the Apple Watch and Airpods. 

Oracle (NYSE:ORCL) will also be in focus as the software company’s first-quarter revenue fell short of expectations after the close Monday, hurt by competition in the Cloud computing space.

Crude prices pushed higher Tuesday, extending recent gains as another storm threatened output from the important Gulf of Mexico region, an area still trying to recover from the damage caused by Hurricane Ida only two weeks ago.

The offshore oil platforms were evacuated on Monday as Tropical Storm Nicholas strengthened into a hurricane, prompting President Joe Biden to declare a state of emergency for Louisiana.

Sentiment was also underpinned by the International Energy Agency’s monthly report predicting a robust rebound in the fourth quarter, while the American Petroleum Institute inventories are due at 4:30 PM ET.

By 7 AM ET, U.S. crude futures traded 0.6% higher at $70.86 a barrel, while the Brent contract rose 0.6% to $73.98. Both benchmarks were near their highest levels since early August hit the previous day.

Additionally, gold futures fell 0.4% to $1,787.95/oz, while EUR/USD traded 0.1% lower at 1.1801.