Futures rise as investors await inflation data, corporate results
Author: Johann M Cherian and Sukriti Gupta
(Reuters) – U.S. stock futures rose on Tuesday as investors awaited December inflation data and upcoming corporate earnings to assess the health of the economy and U.S. Treasury yields fell.
As of 07:11 a.m. ET, the Dow E-mini index was up 107 points, or 0.25%, the S&P 500 E-mini index was up 18.75 points, or 0.32%, and the Nasdaq 100 E-mini index was up 79.25 points, An increase of 0.38%.
Long-term Treasury yields fell on Tuesday, providing some respite but remained near their highest levels since late 2023. Analysts pointed to a report that the incoming Donald Trump administration is considering gradually increasing tariffs to provide the United States with negotiating leverage.
Data compiled by London Stock Exchange Group (LSEG) showed traders have lowered expectations for a rate cut by the Federal Reserve in 2025, with the central bank now expected to cut rates by about 27.4 basis points by the end of the year.
“While the tariff news adds a few basis points to investors' expectations for overall cuts in 2025, it would be more likely if Trump continues to soften on his aggressive policies,” said Raffi Boyadjian, chief market analyst at brokerage XM.
Producer Price Index data will be released at 8:30 a.m. ET in the first of two reports this week that will help gauge U.S. inflation.
Economists polled by Reuters forecast the index would rise to 3.4% in December from 3% the previous month. The focus will be on health care services, portfolio management fees and air tickets, among other components that make up the personal consumption expenditures index, the Fed's preferred inflation measure.
Excluding volatile items such as food and energy, the PPI index is expected to rise to 3.8% in December. Consumer price index data will be released on Wednesday.
Quarterly reports from the big banks are also highly anticipated later this week, with banks expected to report stronger earnings, driven by strong trade and trading.
In pre-market trading, JPMorgan Chase rose 0.4%, Morgan Stanley rose 0.7%, and Citigroup rose 0.6%.
Wall Street's major indexes have been on a downward trajectory since early December, with the price-weighted Dow Jones falling more than 6% from last month's all-time high and the benchmark S&P 500 falling to a two-month low.
The central bank's cautious stance on monetary policy easing this year, coupled with a subsequent batch of upbeat economic data, has stoked investor concerns that inflation may be heading higher.