Stock futures are flat as investors await key inflation report from November

I would be more negative on the market if we got a big reaction to a slightly light CPI, says Trivariate's Parker

Stock futures were flat early Wednesday as Wall Street prepared 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 were 0.01% lower, while futures linked to the S&P 500 and Nasdaq 100 traded flat, falling 0.08% and 0.14% respectively.

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

Investors look ahead to the release of November’s consumer price index report, hoping for signs of slowing inflation. Economists surveyed by Dow Jones expect an increase of 0.3% on a monthly basis or an annual pace of 7.3%. That would be a step down from October’s monthly gain of 0.4% and annual gain of 7.7%.

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

Traders largely priced in an increase of 50 basis points, a slight decrease from the previous four increases. They will also monitor updated economic projections and comments from Chairman Jerome Powell’s press conference for signs of a potential policy turning point as fears of a recession linger on Wall Street.

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

All major S&P 500 sectors ended higher, led to the upside by energy stocks, which rallied as oil prices rose.

“I think this is a reflection of what is expected out of the CPI number tomorrow, and a hope that the Fed will confirm a 50 basis point hike on Wednesday,” said Kevin Philip, partner at Bel Air Investment Advisors. “I think the market, as it has done in the past, is in my opinion a little too heavy on some sort of Fed pivot, and this bounce that we got today is fragile at best.”

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