US stock futures edged higher on Wednesday morning as Wall Street braced for the September consumer price index, due at 8:30 am Eastern, and a second wave of big-bank earnings from Bank of America, Morgan Stanley, BlackRock and State Street.
A cooling core, or another hot print?
Economists polled by Reuters estimated that headline inflation accelerated to 3.6 percent in September, up from 3.4 percent in August, with core CPI — which strips out food and energy — rising 0.2 percent on the month and 2.5 percent from a year earlier. A reading in line with forecasts would mark a slowdown in underlying price pressures, which is the measure the Federal Reserve watches most closely.
The stakes are higher than usual. New York Fed President John Williams said recently that the central bank may need to raise its policy rate once more this year to bring inflation to heel, while seeing no need for further increases in 2027. Traders were pricing in roughly a 22 percent chance of a quarter-point hike at the Fed’s next meeting, according to the CME FedWatch Tool. The Fed also releases its Beige Book survey of regional economic conditions at 2:00 pm Eastern, alongside remarks from Richmond Fed President Tom Barkin.
Banks take centre stage
The earnings season’s second act begins before the opening bell. Bank of America shares slipped 1.5 percent in premarket trading after the lender disclosed a $1.21 billion regulatory fine that could weigh on third-quarter results, while Morgan Stanley edged 0.7 percent higher. Investors will be listening for what executives say about lending trends, credit quality and investment-banking pipelines — signals about how households and businesses are holding up.
It has been a nervous week in markets. The benchmark 10-year Treasury yield slipped two basis points to 5.19 percent on Wednesday, dipping below the 5.2 percent level after touching multiyear highs, while Brent crude held near $106 a barrel as attacks on shipping around Hormuz kept energy markets on edge. Chip stocks traded mixed after a selloff sparked by reports of progress in Chinese chip design, though the so-called Magnificent Seven all rose.
For ordinary borrowers, the morning’s double bill matters because the inflation print sets the tone for mortgage and credit-card rates. September’s unexpectedly weak jobs report showed hiring slowing to just 29,000, and combined with the UN trade agency’s warning that world growth is slowing to 2.6 percent, a hot CPI number could revive the kind of rate-hike talk Wall Street had hoped was over.
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Sources: Reuters · NDTV Profit · FXStreet
