(Reuters) – Futures tracking the S&P 500 stock index took a breather on Wednesday after the index rose for a fourth straight day as investors cautiously waited for a key inflation report that could provide clues about the pace of the Federal Reserve’s interest rate cuts.
Nasdaq 100 futures fell 0.1% and Alphabet Inc. was down 1.3% in premarket trading. Media reports said the U.S. Department of Justice is considering options including breaking up Google.
The rebound in large cap and technology stocks helped the market recoup much of the losses from the global stock market crash earlier this month, which was sparked in part by data showing a sharp rise in the U.S. unemployment rate in July.
Market attention now turns to the US Consumer Price Index (CPI) for July, due for release at 8:30 a.m. ET, with headline inflation expected to rise 3% year-on-year, the same as in June.
The data follows weaker-than-expected producer price data released on Tuesday, which showed inflation continuing to moderate but still below the U.S. central bank’s 2% target.
Atlanta Fed President Bostic said he wanted to see “a little more data” before supporting rate cuts.
“In particular, inflation was below consensus expectations between April and June, with prices and wages both performing weaker than economists had expected,” said Stefan Koopman, senior macro strategist at Rabobank.
“We expect the Fed to cut interest rates in September, primarily as a precaution against rising unemployment and a potential economic downturn.”
Traders widely expect the Fed to begin an easing policy cycle when it meets on Sept. 17-18, but are roughly split on whether that will be a 25 basis point cut or a larger 50 basis point cut.
As of 5:18 a.m., the Dow E-mini was up 50 points, or 0.13%, while the S&P 500 E-mini was little changed at 5,459.25 points.
The Cboe Volatility Index, Wall Street’s gauge of fear, stayed at 18.37 for a second straight day, 20 points below its long-term average, after hitting its highest since 2020 last week.
Among other stocks, Keranova rose 7 percent in pre-market trading after Reuters reported that confectionery giant Mars Inc was close to a deal to buy the maker of Cheez-It and Pringles snacks for nearly $30 billion, citing sources familiar with the matter.
(Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)
