US futures climb after in-line CPI points to rate cut next week

Investing.com – US stock index futures edged higher Wednesday, with sentiment helped by in line consumer inflation data largely cementing a Federal Reserve interest rate cut next week. 

At 08:40 ET (13:40 GMT), Dow Jones Futures gained 100 points, or 0.2%, while S&P 500 Futures gained 25 points, or 0.4%, and Nasdaq 100 Futures rose 115 points, or 0.6%. 

CPI data eyed for more rate cues 

US consumer prices increased slightly on an annualized basis in November, but the figure came in as widely expected, virtually cementing another interest rate cut by the Federal Reserve next week.

The Labor Department’s consumer price index (CPI) rose by 2.7% last month, accelerating slightly from 2.6% in October, while stripping out more volatile items like food and fuel, the “core” number climbed by 3.3% in the twelve months to July, also in line with expectations.

The Federal Reserve has cut interest rates by 75 basis points since September, and markets were widely expecting another 25-bps cut at the December 17-18 meeting. But several Fed officials have called for a more cautious approach to future easing, citing concerns over sticky inflation and resilience in the U.S. economy. 

Investors are also seeking more cues on what President-elect Donald Trump’s policies will entail for inflation and the economy, with his plans for increased trade tariffs expected to increase price pressures. 

Adobe results due 

On the corporate earnings front, Adobe Systems (NASDAQ:ADBE) will release its results after the bell, while Google owner Alphabet (NASDAQ:GOOGL) will be in the spotlight after the tech giant announced a new breakthrough in quantum computing, which could herald a sharp increase in computing speeds.

Additionally, Dave & Buster’s Entertainment (NASDAQ:PLAY) stock slumped 16% premarket after the Dallas-based arcade and restaurant chain announced the exit of CEO Chris Morris and reported disappointing third-quarter results.

Crude looks for Chinese boost 

Crude prices rose Wednesday, with traders looking for more economic stimulus from China, the world’s largest crude importer. 

By 08:45 ET, the US crude futures (WTI) gained 1.3% to $69.50 a barrel, while the Brent contract rose 1.2% to $73.06 a barrel.

Chinese authorities have pledged to enact more targeted stimulus measures to boost economic growth, ramping up hope that oil demand will recover. 

Trade data also showed a sharp increase in Chinese oil imports through November – the first annual growth in seven months. 

However, gains have been limited by industry data showing that US oil inventories unexpectedly grew in the week to Dec. 6, raising concerns that demand will dwindle further in the winter season.

Official data, from the Energy Information Administration, is due later on Wednesday. 

(Ambar Warrick contributed to this article.)