US Stock Futures Hold Lower Ahead of Inflation Report

Stock futures on both the Dow and Nasdaq ended Tuesday’s session lower, as investors keenly awaited an important inflation report to be released today.  

The US Labor Department's Consumer Price Index (CPI) report for October is expected to reflect that consumer prices rose 5.9% for the month compared to last year. This is a further gain on September’s 5.4% level.

Braced for what is expected to be the fastest inflationary jump since 1990, stocks and futures on key US indices ticked down. With big-name brands like Disney (DIS) and Wish (WISH) expected to release quarterly earnings this week, investors fear a muted reception.

With worrying data from China showing that country’s inflation at a 26-year high, market participants in the US have been concerned about how much of an effect high inflation in the world’s two largest economies will have on global markets.

What does this mean for me?

When inflation goes up, consumer prices follow, and this dents consumer sentiment. As a stocks and futures trader, you should be aware that key consumer confidence markers like inflation can have a telling effect on the performances of stocks and indices. 

That said, there are often competing factors at play when one economic marker is flagging. Inflationary pressures will be balanced against recent wins, such as the US Producer Price Index showing a pleasing 8.6% jump in October compared to last year. Also in the good-news column, last week's US October jobs report showed average hourly earnings leapt up by 4.9% compared to the same month last year.