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Stock futures are flat with all eyes on June’s inflation report

Published:

Traders on the ground of the NYSE, July 12, 2022.

Source: NYSE

Stock futures were little modified in overnight trading on Tuesday as investors awaited a key inflation report that is predicted to indicate a fresh high.

Futures on the Dow Jones Industrial Average edged up 18 points. S&P 500 futures and Nasdaq 100 futures were each flat.

The buyer price index, slated for at 8:30 a.m. ET Wednesday, is predicted to climb by 8.8% in June on a year-over-year basis, based on Dow Jones’ survey of economists. That may be even higher than May’s 8.6% reading, which was the largest increase since 1981.

“The market is anticipating that June will likely be the brand new peak,” said Lindsey Bell, Ally’s chief markets and money strategist. “The reading is probably going to verify what the roles report on Friday told us – that the Fed will keep on with their aggressive rate tightening timeline.”

The likely hot reading could prompt the central bank to hike one other 75 basis points during this month’s meeting. Last month, the Fed raised its benchmark rates of interest three-quarters of a percentage point to a variety of 1.5%-1.75% in its most aggressive hike since 1994.

“The Fed’s credibility will likely be tested in coming months with the discharge of inflation numbers and company earnings,” said Andy Sparks, head of portfolio management research at MSCI. “The Fed’s recent aggressive actions to bring down inflation also run the chance of overshooting, pushing an economy that had been showing signs of weakness right into a full scale recession.”

Meanwhile, investors will monitor second-quarter corporate earnings as major banks are set to report this week. JPMorgan and Morgan Stanley are slated to post results Thursday before the bell. Delta Air Lines reports before the bell Wednesday.

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