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Dow futures fall 125 pts; caution ahead of consumer inflation data

Published 05/09/2023, 07:18 PM
© Reuters
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Investing.com -- U.S. stocks are seen opening marginally lower Tuesday, as investors cautiously await the release of key monthly U.S. inflation data, which could influence monetary policy at the Federal Reserve.

At 07:00 ET (11:00 GMT), the Dow futures contract was down 125 points, or 0.4%, S&P 500 futures traded 15 points, or 0.4% lower, and Nasdaq 100 futures dropped 55 points, or 0.4%.

The main indices traded in a muted fashion Monday, as the blue-chip Dow Jones Industrial Average closed 55 points, or 0.2% lower, while the broad-based S&P 500 climbed 0.1%, and the tech-heavy Nasdaq Composite rose 0.2%.

Investors are holding their breath ahead of the release of the April U.S. inflation data, due on Wednesday, after the U.S. central bank delivered its tenth straight interest rate increase last week, as widely expected, but indicated that it may pause its tightening campaign at its next meeting, in June.

The Fed officials stressed the importance of the upcoming data in their next policy deliberations, and the inflation release looms large, especially after Friday’s jobs report showed underlying strength in the labor market.

Also weighing on sentiment is the uncertainty surrounding the country’s debt ceiling, with President Joe Biden inviting lawmakers to the White House later Tuesday to hammer out their differences.

Treasury Secretary Janet Yellen has said the government could run out of money by as early as June 1, adding on Monday that the failure to lift the ceiling would be an “economic catastrophe.”

The U.S. economic data slate is quiet Tuesday, but Fed Governor Philip Jefferson and New York Fed President John Williams are both slated to speak over the course of the day.

The quarterly earnings season is approaching its tail end, with more than 85% of S&P 500 companies having already reported. Fox (NASDAQ:FOX) and Nikola (NASDAQ:NKLA) are a couple of the bigger names set to report quarterly earnings before the bell, while Airbnb (NASDAQ:ABNB) and Rivian Automotive (NASDAQ:RIVN) are due after the market closes.

Palantir (NYSE:PLTR) will also be in the spotlight, with its stock up more than 18% premarket after the big data analytics company hiked its full-year outlook after strong first-quarter results.

On the flip side, Skyworks Solutions (NASDAQ:SWKS) stock fell nearly 10% after the chipmaker reported disappointing current-quarter revenue and earnings, while PayPal (NASDAQ:PYPL) stock dropped over 5% after the online payments giant cut its outlook for annual adjusted operating margin, overshadowing its profit forecast raise.

Oil prices edged lower Tuesday, handing back some of the previous session’s strong gains in cautious trading ahead of the much anticipated U.S. inflation report.

The American Petroleum Institute releases its weekly estimate of U.S. crude inventories later in the session, after showing a drop of almost 4 million barrels last week.

By 07:00 ET, U.S. crude futures traded 0.8% lower at $72.58 a barrel, while the Brent contract dropped 0.8% to $76.39.

Both contracts had settled up more than 2% in the previous trading session.

Additionally, gold futures traded 0.3% higher at $2,039.30/oz, while EUR/USD traded 0.2% lower at 1.0983.

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