U.S. Stock Index Futures & Market Update

U.S. stock index futures dipped slightly on Wednesday as Wall Street experienced a pullback from record highs. In-line consumer inflation data reinforced expectations for a potential interest rate cut in December.

Futures steadied following a session where Wall Street indexes, especially the Nasdaq, achieved record highs, propelled by a surge in technology stocks anticipating lower rates. Tesla Inc (NASDAQ: TSLA) recorded a peak, and NVIDIA Corporation (NASDAQ: NVDA) rose over 3%.

Attention now shifts to the upcoming producer inflation data due Thursday and the Federal Reserve’s meeting next week in December.

S&P 500 Futures decreased by 0.1%, landing at 6,085.75 points, while Nasdaq 100 Futures fell by 0.2% to 21,754.0 points at 18:29 ET (23:29 GMT). Dow Jones Futures also dropped by 0.1% to 44,167.0 points.

CPI Data Supports December Rate Cut Expectations

Consumer Price Index (CPI) revealed inflation increased at its fastest rate in seven months in November. However, the data aligned with forecasts, easing concerns about exceeding predictions.

This further strengthened the probability that the Fed will implement a 25 basis points rate cut during its upcoming meeting, with traders now pricing in a 98.1% likelihood, soaring from last week's 81%, as indicated by CME Fedwatch.

The focus is on the producer price index data coming out Thursday, just days before the Fed’s final meeting of the year. While a rate cut is widely expected, investors remain cautious regarding long-term rate outlooks, particularly due to persistent inflation concerns.

The anticipated expansionary and protectionist policies from incoming President Donald Trump are also likely to increase prices.

Wall St Boosted by Technology Gains

Wall Street benefitted from the expectation of imminent lower rates, with technology stocks experiencing the most significant gains. Speculation surrounding reduced regulatory scrutiny under Trump also fueled tech stock increases, alongside ongoing optimism regarding artificial intelligence.

The NASDAQ Composite soared 1.8%, reaching a record high of 20,033.61 points, while the S&P 500 rose by 0.8% to 6,084.19 points.

Conversely, the Dow Jones Industrial Average fell by 0.2% to 44,148.56 points, primarily affected by declines in major insurance and pharmacy benefit manager stocks following the introduction of a bipartisan bill mandating health insurers to divest their pharmacy businesses.