The major U.S. index futures are pointing to a positive open by Wall Street stocks on Tuesday. Notwithstanding the early pointers, sentiment will largely hinge on the consumer price inflation report for August.
On Monday, U.S. stocks advanced for a fourth straight session, with the major averages settling at two-week highs. The market witnessed across-the-board strength, as evidenced by positive closes by all S&P sector indexes. Energy, IT, communication and consumer discretionary stocks saw particular strength.
“The stock market liked the news that Russian troops are retreating in Ukraine as special forces are recapturing towns,” said hedge fund manager Louis Navellier. Some market experts attributed the move to the market discounting a lower inflation rate.
| Nasdaq Composite | +1.27% | 12,266.41 | |
| S&P 500 Index | +1.06% | 4,110.41 | |
| Dow Industrials | +0.71% | 32,381.34 |
| Nasdaq 100 Futures | +0.51% | |
| S&P 500 Futures | +0.58% | |
| Dow Futures | +0.54% | |
| R2K Futures | +0.56% |
If inflation cools off, hedge funds will get squeezed as they are net short to the tune of a record $107 billion in S&P 500 futures, market analyst Will Meade tweeted.
On the economic front, the Labor Department’s consumer price inflation report for August is due at 8:30 a.m. ET. Economists, on average, expect a downtick in the annual rate of the consumer price index to 8.1% from 8.5% in July. Sell-side firms' estimates range between 7.9% and 8.3%.
Credit Suisse (SIX:CSGN) expects a 0.2% month-over-month drop in the consumer price index, marking the first decline in the headline index in two years. The analyst attributed the decline to a sharp drop in gasoline prices. The core monthly rate is expected at 0.2%, although on a year-over-year basis, the core reading is expected to tick up from 5.9% in July to 6% in August, the firm said.
See also: US Inflation Data Expected To Show 8% Increase In August: What It Means For Interest Rates
Stocks In Focus
- Peloton (NASDAQ:PTON) Interactive, Inc. (NASDAQ: PTON) stock is moving lower following the news of the departure of its co-founders.
- Oracle Corporation (NYSE: NYSE:ORCL) shares are advancing despite its first-quarter earnings trailing estimates.
- Twitter, Inc. (NYSE: NYSE:TWTR) shares are on investors' radar as the company’s shareholders vote on the proposal to be bought by Elon Musk.
The U.S. dollar is moderately weaker against most major currencies, seemingly in anticipation of a softer inflation reading, which may prompt the Fed to adopt a less aggressive stance.
Asian stocks showed tentativeness on Tuesday as traders preferred to stay on the sidelines ahead of the U.S. inflation data. Most major averages from the region closed modestly to moderately higher, although the Hong Kong, Malaysian, and New Zealand markets ended in the red.
The European markets are treading waters ahead of the inflation data from across the Atlantic, although all three averages are seen gaining ground in early trading.
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