Introduction

Stock futures are hovering near the flat line as traders anticipate the release of the August producer price index, which measures wholesale inflation.

Stock Futures

• Dow Jones Industrial Average futures up 10 points or 0.03%
• S&P 500 futures up 0.09%
• Nasdaq 100 futures up 0.1%

Stock Market Performance

The Dow Jones Industrial Average stumbled for a second consecutive day, dropping 0.2%, dragged down by 3M. The Nasdaq Composite closed higher by nearly 0.3%, while the S&P 500 added 0.1%.

August Consumer Price Index (CPI)

The August reading of the consumer price index was a key event for traders. The core CPI, which excludes food and energy, gained 0.3% from the prior month and 4.3% from 12 months earlier. Headline inflation increased 0.6% on a monthly basis and 3.7% from the prior year.

Impact on Federal Reserve

The August CPI reading is not expected to change the Federal Reserve’s course at its policy meeting beginning Sept. 19. Fed funds futures pricing data shows a 97% likelihood of rates remaining unchanged next week.

However, markets are likely to remain volatile in the coming months. There is a 48% probability that rates will rise at the November meeting.

Expert Opinion

“We believe volatility will be with us through year-end as the risk-on assets that dragged the market higher through 2023 will begin to look expensive in the face of elevated yields,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth.

Upcoming Inflation Data

The August producer price index is expected to have risen 0.4%. In July, wholesale prices climbed 0.3%, surpassing expectations. Retail sales data is also due before the market opens.

Earnings Report

Adobe is expected to release its quarterly results after the market closes on Thursday.