Dow futures rise as inflation cools fears

1y inflation expectations down to 2.87% in October per ⁦@NewYorkFed⁩ … lowest since October 2020 pic.twitter.com/kOJwMB4VPQ

— Liz Ann Sonders (@LizAnnSonders) November 12, 2024

U.S. stock futures were slightly higher on Wednesday as investors looked to a key inflation report and assessed the recent post-election rally. Futures tied to the Dow Jones Industrial Average added 0.2%. S&P 500 futures also inched up 0.2%.

US Oct inflation report in line w/expectations. CPI accelerated to 2.6% in Oct from 2.4% in Sep as expected. Core CPI remains unch at 3.3% in Oct in line. pic.twitter.com/PIyWjv2jR2

— Holger Zschaepitz (@Schuldensuehner) November 13, 2024

The consumer price index (CPI) gained 0.2% month over month and 2.6% year over year in October, aligning with expectations. Core prices, excluding food and energy, rose 3.3% last month, matching economists’ estimates. Despite these figures, most traders are still betting that the Federal Reserve will cut rates again next month, based on fed fund futures contracts.

🇺🇸Under control: Moderate #inflation momentum in Oct#CPI +0.2%
✅Core +0.3%
🍲Food +0.2%
⛽️Energy +0%

✅Core gds +0%
🚗New 0%
🚘Used 2.7%
👕Apparel -1.5%

✅Core svc +0.3%
🏘️Shelter +0.4%
🏡Rent +0.3%
🏠OER +0.4%
🏨Hotel +0.5%
🏥Med +0.4%
🛫Air +3.2%
📜Car insur -0.1% pic.twitter.com/2LNh7WAEco

— Gregory Daco (@GregDaco) November 13, 2024

“After a run of unseasonably hot autumn data, today’s number cools fears of an imminent slowdown in the pace of rate cuts,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. The major averages fell during Tuesday’s session. The Dow Jones Industrial Average dropped approximately 382 points, or 0.9%. The S&P 500 declined 0.3%, while the tech-heavy Nasdaq Composite edged down 0.1%. These moves followed a rally on Wall Street sparked by last week’s election, sending stocks to record highs. Other notable economic data releases later this week include the producer price index data and retail sales numbers, which will be announced on Thursday and Friday, respectively. In corporate news, Apple could see gains next year in the aftermath of its recent stock performances, according to Evercore ISI. Analyst Amit Daryanani named Apple as one of its top five investment ideas for 2025, citing the potential impact of AI on iPhone sales for long-term upside.

Dow futures respond to cooling inflation

Daryanani noted that Apple’s stock could reach a price of $300. We continue to think this will be a long-tailed upgrade cycle with iPhone growth improving as more AI features are added,” Daryanani told clients in a Wednesday note. “Beyond AI, we continue to expect solid growth out of Services and Wearables in FY25 along with continued strength in margins.” However, Starbucks may be facing some pullback, according to Redburn Atlantic. Shares slumped more than 1% in the premarket after analyst Edward Lewis downgraded shares of the coffeehouse chain to sell. His updated price target implies around 22% downside from Tuesday’s close. European stocks traded around the flatline on Wednesday, with global markets focused on upcoming U.S. inflation data. Just Eat Takeaway stock soared 20% shortly after opening as the company announced a deal to sell its U.S. unit Grubhub to Wonder for $650 million. In after-hours trading, shares of Spotify jumped about 8% after reporting user growth that beat expectations. Skyworks Solutions slipped nearly 2% despite an earnings beat, as forward guidance came in lighter than expected. Cava shares surged 14% after reporting a top- and bottom-line beat in the third quarter. President-elect Donald Trump has named Tesla to co-lead a new Department of Government Efficiency, highlighting the EV maker’s increasing influence. Tesla’s stock rose in premarket trading, recovering from a 6% drop on Tuesday. Meanwhile, shares of Rivian surged after Volkswagen announced a $5.8 billion investment in the rival electric carmaker. Stay updated with the latest market movements and economic news throughout the day.