US pre-open: Futures lower ahead of CPI reading

Wall Street futures were in the red ahead of the bell on Tuesday as market participants awaited a reading of last month's all-important consumer price index to try and gauge what the Federal Reserve's next moves may be.

As of 1240 GMT, Dow Jones futures were down 0.15%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.41% and 0.76% lower, respectively.

The Dow closed 125.69 points higher on Monday, a fresh record for the blue-chip index.

Tuesday's primary focus will be January's CPI data at 1330 GMT, with economists expecting to see headline inflation increase 0.2% month-on-month and 2.9% year-on-year, dropping below 3% for the first time since April 2021. Core prices, which aim to strip out volatile food and energy components, were expected to have increased 0.3% last month and 3.7% on an annualised basis, respectively.

Trade Nation's David Morrison said: "All the major US stock indices are weaker this morning which is perhaps an indication of some investor butterflies ahead of the data release. There’s quite a lot riding on this CPI number. Investors have already had to push out their predictions for a Fed rate cut from March to May. If CPI comes in above the consensus forecasts, then we could see a shift from May to June. If so, could we finally see some profit-taking and a more significant pull-back?"

Elsewhere on the macro front, the National Federation of Independent Business' small business optimism index fell to 89.9 in January, down from 91.9 in December 2023 and the lowest reading in eight months. Labour quality and inflation both continued to be primary concerns for business owners.

In the corporate space, beverage giant Coca-Cola posted quarterly sales that came in ahead of estimates, primarily driven by higher prices, while toymaker Hasbro reported earnings that fell short of estimates and issued forward guidance that disappointed the market, and hotel chain Marriott beat on earnings but missed on revenues with its latest quarterly numbers.

Casino operator MGM Resorts will report earnings after the close.

Reporting by Iain Gilbert at Sharecast.com