Why S&P 500 and Dow Futures Are Lower on Wednesday – Grayscale Bitcoin Mini Trust (BTC) Common Units of Undivided Partial Benefit (ARCA:BTC)

U.S. stocks could open on a negative note on Wednesday after averages hit record highs last week. Futures for all three major indexes fell slightly as investors await the crucial consumer price index (CPI) release, scheduled to be released on Wednesday.

The Nasdaq, S&P 500 and Dow Jones rose over 4% last week after the GOP sweep and the Federal Reserve delivered a widely expected 25 basis point interest rate cut.

However, after the Dow Jones hit a record 44,000 points earlier in the week, markets saw a slight decline due to profit booking and investor caution.

In pre-market trading on Wednesday the SPDR S&P 500 ETF Trust SPY fell 0.11% to $596.25 and the Invesco QQQ ETF QQQ fell 0.12% to $512.30, according to Benzinga Pro.

Notes from the last meeting:

Both the S&P 500 and Nasdaq ended their five-day winning streaks on Tuesday, falling slightly as investors took a breather.

Crude oil prices remained below $70 but rose slightly due to short-term supply constraints.

Treasury yields fell slightly as investors await inflation data.

Turning to economic data, U.S. consumers' inflation expectations for the coming year fell to 2.9% in October, compared with 3% in each of the previous four months.

The RealClearMarkets/TIPP Economic Optimism Index rose 13.4% to 53.2 in November, its highest level in more than three years.

Most sectors in the S&P 500 closed negative, with materials, healthcare and real estate stocks posting the biggest losses on Tuesday.

However, information technology and communications services stocks bucked the overall market trend and ended the session higher.

Insights from analysts:

Ryan DetrickCarson Group's chief market strategist believes the Fed has enough room to cut interest rates further without worrying about a rise in inflation. According to him, “strong productivity” will help keep inflation under control.

“As long as productivity remains high (as we believe it should), the path is clear for the Fed to cut interest rates further without having to worry about inflation rising again.”

However, analysts at BlackRock Investment Institute expressed caution about inflation.

“We are focusing on the US CPI to see whether inflation will continue to fall towards the Fed's 2 percent target. Short-term inflation has fallen as immigration has increased labor supply and cooled wage growth. However, recent PCE data for the services sector remains challenging, suggesting that inflation could settle above 2% in the medium term.

However, in the longer term, an aging population could maintain continued upward pressure on inflation, the firm said.

Wells Fargo's Lead Economist Jay Bryson expressed similar sentiments, saying: “October's CPI report is likely to support the notion that the last mile of the journey back to the destination will be the most difficult.”

WisdomTree and Wharton School economist Jeremy Siegel further emphasized that the stock markets have enough energy to continue the ongoing upward trend.

“The 'bull market' sentiment remains intact, even as valuations remain a point of observation,” he said, adding that there are expectations of “looser regulations” from the president-elect Donald Trump's Management would benefit the shares.

“The bull market in stocks looks set to continue while the path for bonds becomes more difficult,” Siegel said, but noted that the gains equity investors have seen this year are unlikely to be repeated in 2025.

See also: How to trade futures

Upcoming economic data

Wednesday's economic calendar includes the release of inflation data.

• The Consumer Price Index (CPI) will be released at 8:30 a.m. ET.
• New York Fed President John Williams will speak at 9:30 a.m. ET.
• Dallas Fed President Lorie Logan will speak at 9:45 a.m. ET.
• The monthly US federal budget will be released at 2:00 p.m. ET.

Stocks in focus:

• Rivian Automotive Inc. RIVN Shares rose nearly 13% in premarket trading on Wednesday after the company announced the launch of its joint venture with the company Volkswagen Group VWAGYwith the deal value increasing from $5 billion to $5.8 billion.
• Tesla Inc. TSLA Shares rose over 2.5% in premarket trading on Wednesday, according to the CEO Elon Musk was appointed to the Department of Government Efficiency (DOGE). Vivek Ramaswamy.
• Spirit Airlines Inc. SAVE The stock fell over 65% in premarket trading after the company neared bankruptcy and failed to report its September quarterly results.
• MicroStrategy Inc. MSTR And Robinhood Markets Inc. HOOD The shares continued to rise after that Bitcoin BTC/USD approached $90,000.
• Investors are waiting for the earnings results of CyberArk Software Ltd. CYBR, Cisco Systems, Inc. CSCOAnd Beazer Homes USA, Inc. BZH Today.

Commodities, Bonds and Global Stock Markets:

Crude oil futures rose sharply early in the New York session, rising 0.81% to about $68.67 a barrel.

The 10-year Treasury yield fell slightly to 4.418%.

Most major Asian markets closed in the red on Wednesday, but European markets were in the green in early trading.

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Photo courtesy: Wikimedia