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U.S. equity futures slipped lower in early Wednesday trading, while Treasury yields and the dollar extended their recent pullback, as investors braced for a crucial August inflation report prior to the start of trading.
Stocks ended mixed following back-and-forth session on Tuesday, with tech stocks powering a modest afternoon advance in the S&P 500 and the Nasdaq following a notable pullback in Treasury yields and a slump in global oil prices.
The moves reflected growing concern over the fate of the U.S. economy, which has avoided recession despite one of the most aggressive cycles of Federal Reserve rate hikes on record, heading into the final months of the year and beyond.
Stocks Wednesday will likely focus on the August CPI inflation report, which is expected to show a notable decline in the headline reading with core prices, which strip away food and energy costs, holding steading at 3.2%.
The report, the last major data release prior to next week’s Fed policy meeting is likely to clarify market bets on near-term rate cuts.
The Commerce Department will publish details of its August inflation report Wednesday, the last major data point before next week’s Fed policy meeting.
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Investors are also likely to adjust their risk appetite on the basis of last night’s presidential debate, which saw Vice President Kamala Harris put in a strong performance against her rival, former President Donald Trump, in a sharp-elbowed contest that touched on the economy, foreign policy and both candidates’ domestic agenda.
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Heading into the start of the trading day, futures contracts tied to the S&P 500 suggest a 17 point opening bell decline, with those tied to the Dow Jones Industrial Average priced for a pullback of around 162 points.
The tech-focused Nasdaq, meanwhile, is called 60 points lower, with Nvidia (NVDA) , Tesla (TSLA) and Apple (AAPL) all trading in the red.
Other stocks on the move include Trump Media & Technology Group (DJT) , the owner of former President Trump’s Truth Social website, which tumbled 14.9% following last night’s debate.
Bank of America (BAC) shares extended their recent run of declines, falling another 0.97% in premarket, following another share sale by billionaire investor Warren Buffett, who has dumped more than 7.1 billion in shares of the lender since mid-July.
JPMorgan (JPM) shares, as well, were trading in the red, falling another 0.5% in premarket market following yesterday’s 5.2% slump tied to a muted near-term outlook presented at a banking event yesterday in New York.
In the bond market, benchmark 2-year note yields hit the lowest levels in more than two years in overnight trading and were last changing hands at 3.561% ahead today’s inflation report.
Benchmark 10-year notes, meanwhile, slipped to 3.607% ahead of a $39 billion auction of new notes later in the session.
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In overseas markets, Europe’s Stoxx 600 was marked 0.12% higher in early Frankfurt trading ahead of tomorrow’s European Central Bank rate decision, with the FTSE 100 down 0.05% in London.
Overnight in Asia, the regional MSCI ex-Japan benchmark slipped 0.29% into the close of trading, while the Nikkei 225 closed 1.49% lower in Tokyo.
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