Nasdaq, S&P, Dow futures fall as investors brace for CPI data

Stock index futures fell on Wednesday, a day after the Nasdaq closed at a new record high, as investors awaited important CPI data due later in the day.

Standard & Poor's 500 futures contracts (SPX) -0.1%Nasdaq 100 futures (US100:IND) -0.2% and Dow futures contracts (Endo) -0.1%.

The 10-year Treasury yield (US10Y) fell 2 basis points to 4.42%. The two-year yield (US2Y) was unchanged at 4.81%.

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Markets will be keenly watching the April CPI report, which is expected to be released at 8:30 AM EST today, hoping for any indication of the Federal Reserve's monetary policy for this year. A hotter-than-expected CPI report could dampen hopes for a rate cut.

Economists expect the CPI to be flat on a monthly basis, and to see a marginal annual decline of 3.4%. Core CPI is expected to decline to 3.6% and 0.3% on an annual and monthly basis, respectively.

“A sharp deceleration in inflation this summer is a good bet, given that the labor market is slowing, while most consumers no longer have excess savings, and the pressure on gross margins will continue further,” Pantheon Macroeconomics said, adding that it still… Expects the Fed to start easing interest rates in September.

“Markets were on track to continue a quiet holding pattern ahead of today's CPI, but a late positive rally pushed the S&P 500 closer to an all-time high and the Nasdaq to a new peak,” Deutsche Bank's Jim Reed said. .

Wall Street closed higher on Tuesday on the back of a late-session boost, supported by gains in technology and real estate stocks, even as wholesale inflation data came in higher than expected.

“There were no clear drivers, but perhaps the absence of bad news was enough to inject some relief into the markets,” Reed added.

The producer price index rose 0.5% month-on-month in April, which was more than the expected 0.3% increase and accelerating from the 0.1% decline in March.

Aside from the CPI, traders are also awaiting the April retail sales report, which is expected at the same time. Expectations indicate a monthly decline of 0.4%.

“We expect a weak retail sales report in April, which supports the idea that consumers are starting to feel tired,” Pantheon Macro added.

A slew of economic data scheduled for release today also includes the Empire State Manufacturing Index for May in New York, which is expected to come in at -9.90.

March business inventories and the May housing market index are expected to decline at the same time during market hours. The first index is expected to decline to 0% on a monthly basis, while the housing market index is expected to remain steady at 51.

Minneapolis Fed President Neel Kashkari and Fed Governor Michael Bowman are also scheduled to speak later in the day.