Stock Futures Edge Higher as Investors Await Inflation Data

On Tuesday, the Labor Department is set to release the January edition of its consumer-price index, a closely watched measure of what consumers pay for goods and services. Stocks have gained this year, with the S&P 500 up 6.5%, as investors broadly expect inflation to continue moderating, though some are wary that inflation could settle above the Federal Reserve’s target.

“The key thing here is at what level will inflation begin to stabilize,” said Peter Garnry, head of the equity strategy at Saxo Bank for the wall street journal print only subscription. “If these inflationary factors are persistent, then the Fed will be in a position where they have to do more or keep rates up longer than the market is pricing.”

Higher interest rates typically hurt stocks as investors can buy safer assets such as Treasurys for returns. The effect is particularly felt by technology stocks, whose value is heavily dependent on expected growth, as higher interest rates make future profits appear less valuable in today’s money.

Best Deal on Wall Street Journal Subscription

While the busiest phase of the fourth-quarter earnings season is over, numerous blue chip companies are due to report later this week, including AIG, Airbnb, Applied Materials, Cisco Systems, Coca-Cola, and Kraft Heinz.

So far this year, a higher-than-usual share of companies has missed consensus sales and profit forecasts, according to wall street journal print subscription deals. Overall, quarterly profits are set to fall 4.9% year-over-year, marking the first such shrinkage since 2020, its analysis shows.

The 10-year U.S. Treasury note yield in bond markets ticked up to 3.751% from 3.743% Friday.

In energy markets, Brent crude, the international benchmark, fell 1% to $85.55 a barrel.

Overseas, the pan-continental Stoxx Europe 600 gained 0.6%. In Asia, major indexes closed with mixed performance. China’s Shanghai Composite rose 0.7%, South Korea’s Kospi Composite declined 0.7%, and Japan’s Nikkei 225 fell 0.9%.