US stock futures remained largely unchanged on Tuesday evening, as investors awaited the release of January’s critical inflation report.
The report’s findings are expected to offer crucial insights into the Federal Reserve’s interest rate plans, against a backdrop of fast-moving economic policies under President Donald Trump.
The January CPI report is slated for release on Wednesday at 8:30 a.m. ET.
Economists anticipate a 0.3% rise in consumer prices compared to the previous month, slightly slower than December’s 0.4% increase.
Year-over-year, prices excluding food and energy are projected to have climbed 3.1%.
Powell’s cautionary message: no rush to cut rates
On Tuesday, Federal Reserve Chair Jerome Powell addressed Congress, reaffirming the central bank’s cautious approach to cutting interest rates.
He cited persistent inflation and policy uncertainties under the Trump administration as key factors influencing the Fed’s strategy.
Beyond the macroeconomic picture, individual companies are also capturing investor attention.
Reddit (RDDT) is scheduled to announce earnings after Wednesday’s market close, with Wall Street anticipating strong results.
Robinhood (HOOD), whose stock recently reached a three-year high, is also set to release earnings.
The market’s current state also is happening amid Trump’s proposed tariffs that have rattled global financial markets.
With tariffs jostling markets, a report found that trust in Trump’s handling of the economy has been shaken.
Reciprocal tariffs are expected to be announced on many countries by Friday this week.
Market performance: cautious trading ahead of key data
S&P 500 futures were near the flatline Tuesday evening as investors awaited January’s consumer inflation report.
Futures tied to the broad market index ticked up 0.03%, while Dow Jones Industrial Average futures added just 10 points.
Nasdaq 100 futures were 0.1% higher.
Powell’s testimony and the committee:
Traders were on guard Tuesday after Federal Reserve Chair Jerome Powell told the Senate Banking Committee that policymakers were in no hurry to make further interest rate cuts.
It was the first of two appearances for Powell on Capitol Hill this week, and it occurs at a time when President Donald Trump has been willing to issue tariffs against US trading partners.
Indeed, Trump imposed 25% tariffs on steel and aluminum imports on Monday.
These trade tensions have kept the market in check, with the S&P 500 ending Tuesday near the flatline, while the Nasdaq Composite fell nearly 0.4%.
The Dow outperformed, adding about 0.3%.
Economic resilience: Yardeni’s perspective
Despite these concerns, the economy remains resilient and investors should bear that in mind, said Ed Yardeni, president of Yardeni Research.
“We tend to focus on the macroeconomic policies … but the reality is that the rest of us working stiffs are doing an amazing job of keeping the economy going despite Washington,” he said Tuesday on CNBC’s ‘Power Lunch’.
My conclusion is first of all, when it comes to investing, don’t let your politics get in the way.
In addition to Wednesday’s CPI report, investors will watch Powell’s testimony before the House Committee on Financial Services.
They will also watch for fresh quarterly results from CVS Health, Robinhood, Cisco Systems and MGM Resorts on Wednesday.
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