Stock futures are flat as investors await key November inflation report

Stock futures were flat early Wednesday as Wall Street braced for November’s key inflation report and the start of the Federal Reserve’s December policy meeting.

Futures linked to the Dow Jones Industrial Average fell 0.01%, while futures linked to the S&P 500 and Nasdaq 100 traded flat, down 0.08% and 0.14% respectively.

Oracle shares gained nearly 2% after hours on strong quarterly results.

Investors eagerly await the release of November Consumer Price Index Report, and hoping for signs of slowing inflation. Economists polled by Dow Jones expect a rise of 0.3% on a monthly basis or an annual rate of 7.3%. That would be down from October’s 0.4% monthly increase and 7.7% annual gain.

Tuesday’s inflation report could play a key role in the Federal Reserve’s next rate hike decision expected after its two-day policy meeting on Wednesday.

Traders are largely pricing in a 50 basis point increase, down slightly from the previous four rises. They will also be watching updated economic projections and comments from Chairman Jerome Powell’s press conference for signs of a potential political pivot as fears of a recession linger on Wall Street.

Monday’s overnight moves follow a strong session for all major averages after a tough week. The Dow gained more than 528 points, or 1.58%, while the S&P and Nasdaq rose 1.43% and 1.26% respectively.

All major sectors of the S&P 500 ended with gains, led higher by energy stocks, which rose as oil prices rose.

“I think this reflects what is expected from the CPI figure tomorrow, and a hope that the Fed will confirm a 50 basis point increase on Wednesday,” said Kevin Philip, partner at Bel Air Investment Advisors. “I think the market, as it has before, is, in my opinion, betting a bit too much on some sort of pivot from the Fed and this rebound we got today is fragile at best.”

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