US stock futures slipped on Wednesday, as investors await crucial inflation data that could influence the Federal Reserve’s approach to its upcoming interest rate decision. Following a pause in the post-election rally, futures pointed to a lower open.
As of 03:42 ET (08:42 GMT), Dow futures were down by 117 points, or 0.3%, S&P 500 futures had fallen 11 points, or 0.2%, and Nasdaq 100 futures were off by 34 points, or 0.2%. The focus on Wednesday will be the release of the latest US Consumer Price Index (CPI), which could offer insights into inflation trends ahead of the Fed’s December meeting. Additionally, Elon Musk has been tapped by President-elect Donald Trump to co-lead a new initiative aimed at improving government efficiency.
Major Wall Street indices closed lower in the previous session, breaking a multi-day rally that had been fueled by optimism over Donald Trump’s victory in the U.S. presidential election. Investors had been betting that Trump’s second term would usher in a new era of tax cuts and deregulation. However, some economists warned that his policies could drive inflation higher, potentially causing the Federal Reserve to slow the pace of interest rate cuts more than previously expected.
On Tuesday, Richmond Fed President Thomas Barkin indicated that the central bank stood ready to respond if inflationary pressures picked up again after recent cooling
2. Trump Appoints Musk and Ramaswamy to Lead New Government Efficiency Department
President-elect Donald Trump announced on Tuesday evening that Elon Musk and Vivek Ramaswamy will co-lead a new department focused on streamlining government operations and reducing bureaucratic inefficiencies.
Trump described the Department of Government Efficiency (DOGE) as “potentially the ‘Manhattan Project’ of our time,” with a mission to dismantle bureaucracy, cut excessive regulations, eliminate wasteful spending, and restructure federal agencies.
The agency will operate outside traditional government structures, collaborating with the White House to implement structural reforms and foster a more entrepreneurial approach to governance. Trump also indicated that the roles would be informal and not require Senate confirmation, which would allow Musk to retain his leadership positions at Tesla (NASDAQ: TSLA),(formerly Twitter), and Space
Trump pledged to enhance government efficiency during his campaign, committing to eliminate what he considers unnecessary regulations and reduce the size of several federal agencies in an effort to cut government spending.
**3. CPI Ahead**
Investors are closely watching the upcoming release of the US Consumer Price Index (CPI) for October, set for Wednesday. This key inflation indicator for the world’s largest economy is highly anticipated.
Economists expect annual headline inflation to rise to 2.6% in October, up from 2.4% in September. On a monthly basis, a 0.2% increase is forecast, matching the pace seen in September.
The “core” CPI, which excludes the more volatile categories of food and energy, is expected to show a 3.3% year-on-year increase, with a 0.3% monthly rise, consistent with September’s figures.
Federal Reserve policymakers are expected to closely monitor the upcoming data as they assess the outlook for interest rates through the end of this year and into 2025. According to CME Group’s FedWatch Tool, traders are pricing in a 62.4% probability that the central bank will implement a quarter-point rate cut in December.
Last week, the Fed reduced borrowing costs by 25 basis points, bringing the target range to 4.50% to 4.75%. While acknowledging that inflation remains “somewhat elevated,” officials noted that the risks to achieving stable prices and a strong job market were “roughly balanced.” Fed Chair Jerome Powell indicated that officials will “patiently” consider further rate reductions to bring rates to a “neutral” level, one that neither stimulates nor restrains economic growth. However, analysts are beginning to speculate on how the Fed may adjust its approach in light of Trump’s policy proposals.
### 4. Spotify’s Forecast Beats Expectations
Spotify (NYSE: SPOT) issued a profit forecast for the current quarter that exceeded analysts’ estimates, driven by cost-cutting initiatives and anticipated subscriber growth during the critical holiday season.
The company projected operating income of 481 million euros ($506.76 million) for Q4, surpassing the expected 445.7 million euros, according to LSEG data cited by Reuters. It also forecasted monthly active users of 665 million, higher than the 661 million anticipated by analysts.
Spotify’s stock surged more than 6% in after-hours trading. In an interview with Reuters, CEO Daniel Ek stated that the company is on track to achieve profitability for the full year, calling it “a very important milestone that investors have been waiting for us to reach for a long time.”
In the third quarter, the company saw its gross margin rise to 31.1%, up from 26.4% a year earlier. Monthly active users increased by 11%, reaching 640 million, while gross profit surged 40% to €1.24 billion, surpassing expectations of €1.22 billion.
**5. Oil Prices Trim Losses**
Oil prices recovered slightly on Wednesday, but remained near their lowest point in two weeks after the OPEC producer group downgraded its global oil demand growth forecasts.
As of 03:43 ET, the price of Brent crude had risen by 0.1% to $71.93 per barrel, while US West Texas Intermediate (WTI) crude was largely unchanged at $68.14 per barrel.
Both contracts had dropped more than 5% earlier in the week. In its monthly report on Tuesday, OPEC revised down its oil demand growth forecasts for both 2024 and 2025, primarily citing weaker demand from China, the world’s largest oil importer.
