U.S. futures steady ahead of November inflation data

Investing.com -- U.S. stock futures were little changed on Tuesday, as investors geared up for the upcoming release of the consumer price data and the start of the Fed meeting.

By 07:35 ET (12:35 GMT), the Dow futures contract had gained 61 points or 0.2%, S&P 500 futures had edged up by 3 points or 0.1%, and Nasdaq 100 futures had climbed by 29 points or 0.2%.

On Monday, the main averages on Wall Street ended in the green for the third straight session. The benchmark S&P 500, 30-stock Dow Jones Industrial Average, and tech-heavy Nasdaq Composite all posted their best closing levels so far this year.

The staying power of this rally will likely be tested by the Bureau of Labor Statistics' closely-watched inflation report due out at 08:30 ET (13:30 GMT), as well as the Fed's latest interest rate decision on Wednesday.

Economists expect the annual headline consumer price index (CPI) to come in at 3.1% last month, decelerating slightly from 3.2% in October. Month-on-month, the reading is seen at 0.0%, in line with the October mark.

So-called "core" consumer prices, which strip out volatile items like food and energy, are projected to have risen by 4.0% annually, matching the prior month. On a monthly basis, underlying price gains are estimated at 0.3%, a slightly faster pace than 0.2% in October.

The numbers could provide a glimpse into the impact of the Fed's long-standing bout of interest rate hikes on price growth in the world's largest economy. Although many market observers are predicting that the central bank will soon begin to bring down borrowing costs, Fed Chair Jerome Powell has stressed that officials will continue to move "carefully" as they search for proof that a recent period of elevated inflation has been quelled.

Powell, who has overseen an era of historically rapid policy tightening during his almost six-year tenure at the helm of the world's most influential central bank, faces the task of attempting to give the Fed the flexibility to adjust rates as necessary to cool inflation down to its 2% target.

Along with Powell's statements, investors will also be able to pour through the quarterly "dot plot," an outline of where Fed members see the appropriate path of monetary policy heading in the future.

Markets are currently placing an almost 50% probability on a rate reduction in May next year, according to the CME FedWatch Tool. But the Fed will likely want to see more signals that the U.S. is on course for a "soft landing," in which inflation would be tamed without sparking a sharp slowdown in job growth and economic activity.

Fueling hopes for such a scenario was stronger-than-expected employment data last Friday, which pointed to lingering robustness in the labor market. However, a resilient jobs picture could apply upward pressure to wages and inflation, potentially bolstering the case for the Fed to keep rates at their current heights for a longer period of time.

"Should CPI be on the softer side, we expect the Fed to talk back a lot of the cuts that the market rushes to price back in, with specific reference to Friday's [nonfarm payrolls] print and a firm labour market," analysts at JPMorgan (NYSE:JPM) said in a note to clients. "And should CPI be firm, the Fed will have the dual data of inflation and labour market to push back on all rate cuts, perhaps until [the second half of 2024]."

Epic Games wins Google antitrust lawsuit

A federal jury has found against Google in a high-profile antitrust lawsuit brought by "Fortnite"-maker Epic Games.

Epic had argued that the tech giant essentially used its Play app store as an illegal monopoly that unfairly charged high fees on developers and suppressed competition in the Android app market. According to a court filing, the jury ruled in favor of Epic on all counts.

The court will begin decide what changes Google will need to put in place in January. In a statement quoted by Reuters, Google said it will appeal the ruling.

Shares in Google-parent Alphabet (NASDAQ:GOOGL) were marginally lower in U.S. premarket trading.

Elsewhere, Oracle (NYSE:ORCL) shares dropped premarket after the software company posted weaker-than-expected revenue in its fiscal second quarter due to a challenging economic environment and heightened competition in the cloud computing sector.

Oil slips amid concerns over excess supply, sluggish demand

Oil prices dipped on Tuesday, reversing earlier gains, as worries over excess supply and weak demand offset the impact of an attack on a commercial chemical tanker by Iran-aligned Houthis.

By 07:34 ET, Brent oil futures expiring in February had slipped 0.7% to $75.52 a barrel, while West Texas Intermediate crude futures had fallen by 0.6% to $70.88 per barrel.

Traders were also taking some caution prior to the publication of the all-important U.S. inflation report and the Fed's forthcoming rate vote. Signs of sticky U.S. inflation in the upcoming data may persuade policymakers to keep borrowing costs higher for longer -- a trend that could eat into demand in the world biggest fuel consumer.

Meanwhile, spot gold edged up by 0.3% to $1,987.21 per troy ounce. The dollar index, which tracks the greenback against a basket of fellow currencies, was lower by 0.3% at 103.74.

This article first appeared in Investing.com