Early trading on Tuesday is likely to see stocks under pressure, as indicated by major index futures suggesting a significant drop in the markets, specifically a 1.1 percent downturn in S&P 500 futures.
This projected decline is largely attributed to a Labor Department report that revealed a higher-than-expected increase in US consumer prices in January. According to the data, the consumer price index rose by 0.3 percent in January, exceeding the predicted rise of 0.2 percent. Core consumer prices, excluding food and energy prices, also indicated a higher jump of 0.4 percent, surpassing the forecasted 0.3 percent.
Although the report demonstrated a decrease in the annual rate of consumer price growth from 3.4 percent in December to 3.1 percent in January, it failed to meet economists' expectations of a slowdown to 2.9 percent. Similarly, the unchanged annual rate of core consumer price at 3.9 percent in January outpaced forecasts of a deceleration to 3.7 percent.
Based on the Federal Reserve's policy of needing confirmed inflation slowdown before reducing interest rates, this data may dampen hopes of an early rate cut. The CME Group's FedWatch Tool currently predicts only a 5.5 percent likelihood of a quarter point rate cut in March, decreasing to 32.3 percent in early May.
Tuesday's trading session was marked by stagnation, with major averages fluctuating slightly but eventually closing with little change. Although the Nasdaq and S&P 500 were on course to break record closing highs, they retreated in the afternoon, settling at 15,942.55 and 5,021.84, respectively. Meanwhile, the Dow ended on a high, closing at a record 38,797.38.
From an international perspective, Asia-Pacific stock markets presented a mixed picture on Tuesday, with Japan's Nikkei 225 Index surging by 2.9 percent and Australia's S&P/ASX 200 Index dipping by 0.2 percent. Europe's major markets mainly followed a descending trend, led by the French CAC 40 Index and the German DAX Index dropping 0.8 percent and 0.9 percent, respectively.
Commodities trading saw crude oil futures up by $0.76 to $77.68 a barrel, while gold futures increased by $1.40 to $2,034.40 an ounce. Regarding currency, the US dollar was trading at 150.27 yen and valued at $1.0726 against the euro.
