US Stock Futures Tick Up as Yields Ease Ahead of Key Inflation Report

US stock index futures edged higher on Wednesday morning as Treasury yields retreated from multi-decade highs, with investors bracing for a key inflation reading that could shape expectations for the Federal Reserve’s next move, according to Reuters.

At 05:27 a.m. ET, Dow E-minis were up 95 points, or 0.18 percent, while S&P 500 E-minis added 8 points, or 0.1 percent; Nasdaq 100 E-minis were essentially flat, down 0.01 percent. Most megacap and growth stocks ticked higher in premarket trading, with Nvidia, Alphabet and Apple all moving up, while chipmakers AMD and Marvell slipped, the outlet reported.

The August reading of personal consumption expenditures — the inflation gauge most closely watched by the Fed — is due later on Wednesday, with economists polled by Reuters expecting annual inflation to stand at 3.7 percent.

Money market data shows traders are nearly evenly split on whether the Fed will raise interest rates again in October, down from a more than 70 percent chance priced in just a week ago, according to the CME FedWatch Tool.

September has been turbulent for markets. Immense volatility in the bond markets and elevated crude oil prices, driven by the ongoing conflict between the United States and Iran, have reignited inflation concerns and weighed on risk assets worldwide, according to Reuters. Still, the S&P 500 and the Nasdaq remain on pace for a second straight quarterly gain, while the Dow is set for a quarterly fall and its first monthly decline since March.

The yield on the 10-year Treasury bond eased roughly 3 basis points on Wednesday, having hit its highest level since 2007 in the previous session, while the 30-year yield also pulled back after touching a 24-year high, according to Reuters and Barron’s.

Sources

• Reuters – US stock futures inch up as yields ease, inflation report looms
• Barron’s – U.S. Treasury Yields Fall as Fed Speak Calms Rate Hike Expectations