CPI Data to Decide Fed Rate Cut Path as Stocks Hold Steady

On Wednesday, stock index futures remained mostly unchanged in anticipation of the crucial consumer price index (CPI) data, which will determine the impact of rising inflation on the Federal Reserve’s potential interest rate cuts. The tech-heavy Nasdaq reached a new record closing high on Tuesday following optimistic statements from Fed Chair Jerome Powell regarding economic growth and inflation during his recent remarks. According to a Reuters poll, the CPI is projected to increase by 0.4% in April, which would be consistent with the previous month’s rise. However, if the CPI surpasses expectations, it may intensify concerns over persistent inflation and prompt speculation that the Fed might postpone its plans to reduce interest rates. Traders currently estimate a 50.5% probability that the Fed will commence reducing interest rates in September, based on data from the CME FedWatch Tool. Despite this, the S&P 500 has nearly hit a new record high, while the Dow Jones Industrial Average is poised to exceed 40,000 for the first time. Other economic indicators scheduled for publication include retail sales statistics and commentary from Federal Reserve officials Neel Kashkari, Michael Barr, and Michelle Bowman. In pre-market trading, Dow e-minis experienced a modest uptick, whereas S&P 500 e-minis and Nasdaq 100 e-minis both demonstrated minimal changes. Megacap growth and technology companies, such as Tesla, saw mixed results, while retail investors’ favorites GameStop and AMC Entertainment both achieved substantial gains following encouragement from “Roaring Kitty” Keith Gill, a prominent figure in the 2021 meme stock phenomenon. Shares of New York Community Bancorp also witnessed a 4.9% increase after disclosing a deal to sell approximately $5 billion worth of mortgage warehouse loans to JPMorgan Chase. (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila)