US stock futures rose on Tuesday as investors braced for a highly anticipated inflation reading.
Futures tied to the tech-heavy S&P 500 and Nasdaq Composite are up nearly 0.7% in pre-market trading. Dow futures jumped 200 points, or nearly 0.6%.
Bureau of Labor Statistics is August Consumer Price Index (CPI) due to be released It’s 8:30 a.m. ET. Data is expected to show inflation rose at an annualized pace of 8.1% last month, according to consensus estimates compiled by Bloomberg. If checked, the reading will mark the second consecutive moderation in prices from It reached its highest level in four decades earlier this year.
Tuesday’s reading is likely to be a success or pause moment for the stock markets’ recent bounce. On Monday, the S&P 500’s 1% gain in all 11 sectors helped the index make its biggest advance in four days since June, according to Bloomberg data.
The latest measure of how quickly inflation is rising across the US economy comes one week before Federal Reserve officials set their next meeting on September 20-21. Market participants largely expect policy makers to raise rates for the third time in a row by 75 basis points weeks after that. strict messages A member of the US Central Bank.
Chris Larkin, managing director of trading at Morgan Stanley’s E*TRADE, said in a note.
“With market expectations that the Fed will be less aggressive, investors may focus on other challenges the market faces, such as unrealistically high earnings estimates, and headwinds posed by a very strong US dollar.”
peloton (PTON) was in the spotlight early Tuesday following the Monday noon announcement Co-founder John Foley walks away from the board, months after Peloton appointed former Spotify CEO Barry McCarthy as CEO. Shares were down about 2% before the opening.
Elsewhere, Rent the Runway shares (Leasing) Nearly 25% in pre-market trading Tuesday after the company Cut back on her guidance for the whole year She unveiled plans to cut 24% of the company’s workforce, citing “harsher overall conditions.”
“Once we get past our CPI and PPI inflation reports this week and the Federal Open Market Committee meeting next week, the next major market catalyst will be third-quarter earnings,” DataTrek’s Nicholas Colas said in a note.
According to data from FactSet Research, earnings growth forecasts for the S&P 500 stand at a 3.7% increase for the third quarter, down sharply from the 9.8% growth forecast at the end of June.
Colas notes that analysts have lowered their third-quarter earnings forecast for the past 2-3 months for every sector in the index except energy, and seven out of 11 groups are now expected to show an outright decline in earnings year-over-year, compared to just the sector. Three in the second quarter.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed