U.S. stock futures dipped Tuesday night as investors weighed the recent presidential debate and anticipated key inflation data.
With the August Consumer Price Index (CPI) report due Wednesday, markets remained cautious.
Futures for the Dow Jones Industrial Average dropped 172 points, or 0.42%, while S&P 500 futures fell 0.52%, and Nasdaq 100 futures declined 0.68%.
GameStop shares took a 10% hit in after-hours trading after the video game retailer announced an amended agreement with the SEC, allowing it to sell up to 20 million more shares of its Class A common stock.
Earlier in the day, the S&P 500 gained 0.5%, and the Nasdaq climbed 0.8%, buoyed by a surge in Nvidia shares.
However, the Dow ended down 0.2%, weighed down by a decline in JPMorgan shares.
The CPI report is set to take center stage Wednesday. Economists expect the index to show a 0.2% month-over-month increase, translating to a 2.6% annual rise.
Alongside Thursday’s producer price index, the data could shape the Federal Reserve’s decision on interest rates during its upcoming meeting.
Market sentiment is split on the size of the Fed’s move, with futures traders forecasting a 69% chance of a 25-basis-point rate cut and a 31% chance of a larger, 50-basis-point reduction.
Kristina Hooper, chief global market strategist at Invesco, noted that the Fed is likely to go for a 25-basis-point cut, stating that a larger cut “would set off alarm bells and would also be an admission of guilt.”
She added that while the Fed’s current monetary policy hasn’t caused irreversible harm, keeping rates at these levels for too long could increase the likelihood of a recession.
Hooper also suggested that central bankers might use next week’s meeting to signal, via their dot plot, that further rate reductions could come sooner than expected.
The next few days are critical for investors as the business community closely watches the Fed’s decision and upcoming economic indicators.
This could set the tone for market movements and broader economic sentiment in the weeks ahead.
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