US pre-open: Futures point to modest gains ahead of CPI reading

Wall Street futures were in the green ahead of the bell on Tuesday ahead of a key inflation indicator from the Bureau of Labor Statistics.

As of 1300 GMT, Dow Jones futures were up 0.18%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.07% and 0.20% firmer, respectively.

The Dow closed 157.06 points higher on Monday, extending gains recorded in the previous session on the back of news that the US economy had added more jobs than expected in November.

Tuesday's primary focus will be November's consumer price index report, slated for release at 1330 GMT, with economists expecting to see flat month-on-month prices and a 3.1% year-on-year rise. Core CPI, which aims to strip out volatile food and energy prices, was pegged to have grown 0.3% from October and 4.0% from a year earlier.

The data also comes just ahead of the Federal Reserve's final monetary policy announcement of 2023, due on Wednesday, where it will mull over its policy decisions and present its economic forecast.

Scope Markets' Joshua Mahony said: "Today sees market turn their attention towards the US inflation situation, with bulls hoping that a continuation of the wider disinflationary trend will continue to push equity markets higher.

"With the Dow, S&P 500 and Nasdaq all hitting a fresh 11-month high this week, the perception within markets clearly remains geared towards the optimism of the expected return to easing over the risk of a hawkish repricing if the Fed Dot plot highlights a less optimistic outlook in relation to 2024 rate cuts. The expectations of a 0.1% drop in headline inflation could cause concern for some over the pace of disinflation going forward, but there is hope that the sharp declines in energy markets could provide a drag on headline CPI given the -0.5% slump in eurozone inflation for November."

Elsewhere on the macro front, the National Federation of Independent Business' small business optimism index fell for a fourth month in a row to hit 90.6 in November, its lowest level since May and down from 90.7 in October and short of forecasts for a reading of 90.7

Owners expecting business conditions to improve over the next six months increased one point to -42%. However, 40% of all owners reported job openings they could not fill in the current period, down three points month-on-month, while the net percentage of owners raising average selling prices decreased five points from October to 25% in November.

In the corporate space, tech firm Oracle traded lower in pre-market trading after revealing second-quarter revenues had fallen short of expectations on the Street, while toymaker Hasbro also headed south on the back of news that it was laying off roughly 1,100 staff members.

Reporting by Iain Gilbert at Sharecast.com