U.S. Stock Futures Muted Ahead of Key Inflation Data and Fed Testimony

U.S. stock index futures remained subdued on Wednesday as investors awaited crucial inflation data and the second day of Fed Chair Jerome Powell's testimony before Congress.

Inflation Expectations

January's consumer price index (CPI) is expected to rise 0.3% month-on-month, with headline inflation projected to reach 2.9% year-over-year, according to economists polled by Reuters. Core inflation, excluding volatile items like food and energy, is forecast to increase 0.3% monthly and ease to 3.1% annually.

Fed Chair's Testimony

Following the CPI release, Fed Chair Powell will continue his testimony. On Tuesday, he emphasized that the central bank was not in a hurry to cut interest rates again but declined to comment on the impact of President Trump's tariff policies.

Market Volatility Expected

Analysts anticipate market volatility due to the combination of fresh tariffs, Powell's testimony, and key inflation data. "If tariffs fuel inflation fears, the Fed may adopt a more hawkish stance, adding uncertainty," said FXTM senior analyst Lukman Otunuga.

Interest Rate Expectations

Traders anticipate at least one 25-basis-point interest rate cut this year and a reduced probability of a second cut compared to Tuesday's estimates.

Tariff Impact

The January inflation data will be the last before the impact of Trump's tariffs, which were implemented this month. Trump levied additional tariffs on Chinese goods and steel and aluminum imports. Reciprocal tariffs are also being considered.

Premarket Trading

At 4:52 a.m. ET, Dow E-minis fell 0.17%, S&P 500 E-minis decreased 0.16%, and Nasdaq 100 E-minis declined 0.07%. Tesla extended its decline in premarket trading.

Earnings Reports

CVS Health, Biogen, and Kraft Heinz will release earnings before the market opens.

Other Notable News

Lyft dropped 12.4% after forecasting below-expectation gross bookings for the current quarter. Uber also fell. Super Micro Computer surged 5.5% after expressing confidence in filing delayed financial reports by February 25.