Futures rise as investors await inflation data, corporate results
By Johann M Cherian and Sukriti Gupta
(Reuters) -U.S. stock index futures rose on Tuesday, buoyed by falling Treasury yields as investors awaited the December inflation numbers and upcoming corporate earnings to evaluate the health of the economy.
At 07:11 a.m. ET, Dow E-minis were up 107 points, or 0.25%, S&P 500 E-minis were up 18.75 points, or 0.32% and Nasdaq 100 E-minis were up 79.25 points, or 0.38%.
Providing some respite, yields on longer-dated Treasury bonds dipped on Tuesday, but are near their highest levels since late 2023. Analysts pointed to a report that said the incoming Donald Trump administration was considering gradual tariff hikes, giving the U.S. negotiating leverage.
Traders have pared expectations for a Fed rate cut in 2025, according to data compiled by LSEG, and now see the central bank lowering interest rates by about 27.4 basis points by the end of the year.
"Although the tariff news has seen investors add a few basis points to the total cuts expected for 2025, there is scope for an even larger reversal in the recent moves, highlighting the downside risks to the dollar, should Trump continue to soften his stance on his aggressive policies," said Raffi Boyadjian, lead market analyst at brokerage XM.
The Producer Price Index data, due at 8:30 a.m. ET, will be the first of two reports due this week that will help gauge where inflation stands in the U.S.
Economists polled by Reuters forecast the index to have risen to 3.4% in December from 3% the previous month. The focus will be on healthcare services, portfolio management fees and airfares among the components that feed into the Personal Consumption Expenditure index, the U.S. Federal Reserve's preferred inflation gauge.
Excluding volatile items such as food and energy, the PPI index is expected to have risen to 3.8% in December. The Consumer Price Index data is due on Wednesday.
Quarterly reports from big banks are also highly anticipated later this week, with the lenders expected to report stronger earnings, fueled by robust dealmaking and trading.
JPMorgan Chase & Co (NYSE:JPM ) added 0.4%, Morgan Stanley (NYSE:MS ) rose 0.7% and Citigroup (NYSE:C ) climbed 0.6% in premarket trading.
Wall Street's main indexes have been on a downward trajectory since early December, with the price-weighted Dow down more than 6% from its record high hit last month, and the benchmark S&P 500 at a two-month low.
The central bank's cautious stance on monetary policy easing this year, along with subsequent batches of upbeat economic data, raised investor concerns that inflation might be running high.
Trump is expected to take office on Jan. 20 and his policy proposals on tariffs and immigration are widely expected to fuel inflation.
Comments from Kansas City Fed President Jeffrey Schmid and New York Fed President John Williams, who are voting members on the Federal Open Market Committee, will also be in focus.
AI-bellwether Nvidia (NASDAQ:NVDA ) rose 1.4% after logging four days of declines, on expectations that fresh U.S. export restrictions could hurt the company's revenues, while Tesla (NASDAQ:TSLA ) added 2%.
Applied Digital jumped more than 25% after a report said Macquarie would take a 15% stake in it and also invest up to $5 billion in the company's AI data centers.
Source: Investing.com