US stock index futures fell slightly as investors awaited the release of key inflation data. The report is expected to shed light on the current inflation situation, which has been complicated by the recent rise in oil prices and its possible impact on interest rates. Rising energy costs are expected to push up headline inflation in August, while a weak Oracle forecast contributed to cautious sentiment on Wall Street.
Data from the Labor Department will be released at 8:30 am ET and is expected to show a slight decline in the core consumer price index to 4.3% year-over-year in August, from 4.7%. However, headline inflation is expected to rise to 3.6%. Analysts have suggested that any increase in fundamentals could negatively impact the markets due to possible implications on interest rates.
Market analyst Tim Waterer says higher oil costs are likely to affect the headline inflation number. He explained that if inflation rises further, it will pose a challenge not only to the Federal Reserve, but also to central banks around the world. The possible resurgence of inflation at an inopportune time can complicate monetary policy decisions.
Investors closely monitor the inflation report for information on future Federal Reserve actions. Currently, there is a 93% chance that prices will remain stable in September, but less than a 50% chance of a pause in November and December. According to a Reuters poll, the Federal Reserve is expected to cut rates only between April and June next year.
In addition to inflation data, investors will also pay attention to producer prices and retail sales figures in August. These indicators will provide more context ahead of the Federal Reserve’s policy decision on September 20.
At the time of writing, Dow futures were down 0.1%, S&P 500 futures were down 0.09%, and Nasdaq 100 futures were down 0.08%. Tech giant Apple was little changed in pre-market trading after announcing new iPhone models, while Ford gained 1.8% on plans to increase production of the F-150 hybrid. pickup trucks. General Motors also rose 1.1% after receiving a “buy” rating from UBS.
Shares of Chinese electric vehicle makers Li Auto, Nio and Xpeng fell between 1.7% and 3.1% after the European Commission launched an investigation into possible tariffs on their vehicles.