On Tuesday, U.S. stock index futures showed little movement as investors held back from making significant investments, awaiting a pivotal inflation report later this week. This report is anticipated to play a crucial role in shaping the Federal Reserve's decisions on interest rate adjustments within the year.
The performance of the major indexes on Monday was relatively unchanged, with a rise in Treasury yields, spurred by a robust employment report from the previous week, tempering any potential advances.
Attention is centered on the upcoming U.S. Consumer Price Index (CPI) figures for March, set to be released on Wednesday. Projections suggest an uptick in headline inflation to 3.4% on an annual basis, up from February's 3.2%.
The core inflation rate, which strips out the more volatile elements such as food and energy, is forecasted to marginally decrease to 3.7% year-on-year from February's 3.8%.
With the U.S. economy showing signs of strength, investor expectations for Federal Reserve rate cuts have been moderated. The anticipation for a cumulative easing of approximately 60 basis points this year marks the most conservative outlook since October, a stark contrast to the 150 basis points anticipated at the beginning of the year, as per LSEG data.
Market participants now assign a nearly 51% probability to a minimum 25 basis point reduction in rates by June, a decrease from last week's 64%, based on the CME's FedWatch Tool.
Upcoming minutes from the Fed's March assembly, which maintained the forecast of three rate cuts this year, are eagerly awaited later this week. These minutes are expected to offer further insight into the central bank's stance on monetary easing.
In related news, Chicago Fed President Austan Goolsbee highlighted the challenge of sustaining the current interest rate levels without impairing the economy, though he refrained from directly addressing the Fed's future policy direction.
Investor focus is also shifting towards the first-quarter earnings season, particularly on reports from banking leaders such as JPMorgan Chase, Citigroup, and Wells Fargo, expected later this week.
Early trading saw Dow e-minis drop slightly by 10 points, or 0.03%, while S&P 500 e-minis gained 2.75 points, or 0.05%. Nasdaq 100 e-minis saw an increase of 21.25 points, or 0.12%.
In the cryptocurrency sector, stocks related to blockchain and digital currencies experienced a downturn in premarket activities, following a decline in bitcoin prices. Notably, Coinbase Global, Marathon Digital, and MicroStrategy each saw a decrease of over 1%.
