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Equity futures rise as investors await key inflation reports

Commuters leave a Wall Street subway station near the New York Stock Exchange.

Michael Nagle | Bloomberg | Getty Images

Futures contracts tied to the major US stock indices rose during the overnight session on Wednesday night as investors looked at a key inflation report to be expected on Thursday.

Dow futures advanced 42 points, while those tied to the S&P 500 added 0.1

%. Nasdaq 100 contracts were mostly flat.

US markets continued to trade within a tight range on Wednesday, with all three major indices ending the day within 0.5% of Tuesday’s closed levels. The Dow, S&P 500 and Nasdaq Composite all fell during regular trading, ending the session further away from their respective all-time highs.

The S&P 500 remains closest to its benchmark and is only 0.44% away from a new record high. Dow and Nasdaq are approx. 2% off records.

After hours of session, the stock of video game retailer GameStop slipped 10% in expanded trading despite the company’s announcement that it tapped former Amazon CEO Matt Furlong for being the next CEO. Investors may be appalled by a request for information on the Securities and Exchange Commission as well as an application to the regulator to sell up to 5 million additional shares.

Other topics in the recent meme trade, including Clean Energy Fuels and Clover Health, also moved in the expanded session.

Investors are awaiting the next reading of inflation to measure if higher price pressures are just temporary as the economy continues to recover from the pandemic-induced recession.

The Labor Department is scheduled to release its consumer price index data at 1 p.m. 8.30 ET Thursday. Economists polled by Dow Jones expect the May CPI report to show prices rose 4.7% year-on-year after the April increase of 4.2%.

For weeks, investors have been worried about whether an inflation rash could cause the Federal Reserve to slow down the pace of its asset purchases or begin to signal a rise in interest rates. Yet some say that this fear is premature and that the central bank will give the markets plenty of time before it takes action.

“We believe the Fed’s easy monetary policies will last for some time,” wrote Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.

“We do not expect the Fed to raise interest rates this year or next year, but we probably think our central bankers are starting to suggest that they are considering toning down their bond purchases, possibly as soon as this fall,” he added. “This means we continue to lean towards cyclical sectors that are sensitive to the ebb and flow of the economy.”

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