Futures flat in lead up to inflation data

By Thomson Reuters Apr 9, 2024 | 5:09 AM

(Reuters) – U.S. stock index futures were flat on Tuesday, as investors refrained from placing large bets ahead of a crucial inflation reading later in the week that could influence the Federal Reserve’s stance on rate cuts this year.

All three major indexes had a flat finish on Monday, as a rise in Treasury yields after a blowout jobs report last week kept gains in check.

The focus will be on the March reading of the U.S. Consumer Price Index (CPI), due on Wednesday, that is expected to show a rise in headline inflation to 3.4% year-on-year, from 3.2% in February.

The core figure, which excludes volatile components such as food and energy, is expected to ease to 3.7% year-on-year, versus 3.8% in February.

Amid signs of a robust U.S. economy, investors have been scaling back expectations of how much the Fed will cut interest rates this year. Current bets of around a 60-basis-point easing are the lowest since October, according to LSEG data, compared to about 150 bps that was priced in at the start of 2024.

Traders see a nearly 51% chance of an at-least 25 bps cut in June, according to the CME’s FedWatch Tool, down from 64% last week.

Minutes from the Fed’s March meeting – where it stuck to its guidance of three rate cuts this year – are due later in the week and could be key in gauging where the central bank stands on policy easing.

Meanwhile, Chicago Fed President Austan Goolsbee said on Monday the U.S. central bank must weigh how much longer it can maintain its current interest-rate stance without damaging the economy, but did not comment directly on the Fed’s monetary policy outlook.

Also on the radar is the first-quarter earnings season, with the spotlight on banking giants JPMorgan Chase, Citigroup and Wells Fargo that are scheduled to report towards the end of the week.

At 5:36 a.m. ET, Dow e-minis were down 10 points, or 0.03%, S&P 500 e-minis were up 2.75 points, or 0.05%, and Nasdaq 100 e-minis were up 21.25 points, or 0.12%.

Cryptocurrency and blockchain-related stocks declined in premarket trading, tracking falling bitcoin prices. Exchange operator Coinbase Global, crypto miner Marathon Digital and software company MicroStrategy dipped over 1% each.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)