US stock futures steady as rate cut bets build after CPI data; Powell awaited

U.S. stock index futures steadied in evening deals on Wednesday after in-line consumer inflation data shored up bets on a December rate cut, with an upcoming speech by Federal Reserve Chair Jerome Powell set to provide more cues.

Futures steadied after a middling session on Wall Street, with U.S. stock benchmarks turning rangebound as a risk-on rally in the wake of Donald Trump’s election victory now appeared to be cooling. 

While Wednesday’s consumer price index reading was in line with expectations, it still showed inflation remaining sticky, which raised doubts over just how much further the Fed will cut interest rates during this easing cycle.

S&P 500 Futures were flat at 6,0126.50 points, while Nasdaq 100 Futures fell slightly to 21,148.25 points by 19:19 ET (23:19 GMT). Dow Jones Futures were flat at 44,122.0 points.  Dec rate cut bets grow on CPI data; Powell in focus 

Markets were seen sharply increasing bets on a December interest rate cut, after CPI data read in line with expectations for October.

Traders were pricing in a 85.3% chance for a 25 basis point cut next month, up sharply from a 60.2% chance seen earlier this week. Traders were also pricing in a 14.7% chance for a hold, CME Fedwatch showed. 

But Wednesday’s CPI reading showed inflation remained sticky, as the headline rate rose slightly year-on-year, while core inflation remained pinned above 3%. The reading pushed up uncertainty over inflation and interest rates in the long term.

The sticky inflation reading also came amid bets that Trump will dole out more expansionary policies, underpinning inflation and interest rates in the long term.

Focus was now on an address by Fed Chair Jerome Powell , on Thursday evening, for more cues on monetary policy. Powell had reiterated the Fed’s data-driven stance on rate cuts last week, after the central bank cut rates by 25 bps. Wall St stalls below record highs as Trump trade cools, yields rise 

Wall Street indexes logged a middling performance on Wednesday after retreating slightly from record highs earlier this week. 

A rally in the wake of Trump’s election victory now appeared to be cooling, as investors sought more cues on what his policies will entail. Trump on Tuesday announced the formation of a new department for streamlining government agencies, led by Elon Musk and Vivek Ramaswamy, although the news had little bearing on markets.

The S&P 500 was flat at 5,985.38 points, while the Dow Jones Industrial Average rose 0.1% to 43,958.19 points. The NASDAQ Composite fell 0.2% to 19,236.22 points.

A sharp increase in Treasury yields, following Trump’s victory, pressured markets in recent sessions. 

Source: Investing.com