Stock futures rise as investors wait for inflation data

Stock futures opened higher Thursday night as investors awaited a key inflation report ahead of the Federal Reserve’s final policy-making meeting of the year next week.

Contracts achieved on the S&P 500. Previously, the blue-chip index closed its regular session in the red after three consecutive days of gains, with concerns about Omicron beginning to ease as new developments suggested the variant may not cause infections as severe as previously feared. The Nasdaq fell 1.7% during the regular trading day but was still on track for a weekly return close to 2.9% after making solid gains earlier this week.

Investors are expected to receive the latest Consumer Price Index (CPI) from the Department of Labor on Friday, which is expected to see multi-decade high inflation again in November. Consensus economists expect the November CPI to rise 6.8% from last year, or the fastest annual rate since the 1980s. And even excluding more volatile food and energy prices, core CPI likely rose 4.9% last year, or the highest rate in about three decades.

“We think inflation will still be pretty broad when we see tomorrow’s report,” Luke Tilley, chief economist at Wilmington Trust, told Yahoo Finance Live on Thursday. “But what we’re looking for is a delay over 2022.”

“That doesn’t mean prices will fall, it’s just a matter of, will they rise as much in 2022 as they would in 2021 without the kind of fiscal stimulus we’ve had this year? And we don’t think that’s going to happen because it won’t be that much of a pressure on the demand side,” he added. “And then we look on the supply side at improving the labor market, at more people going back to work and, of course, at improving delivery and ports.”

Other recent data has further underlined the current tightness on the supply side of the economy. Weekly US unemployment claims fell more than expected to hit lowest level since 1969 last week, are falling even below pre-pandemic levels. And More than 11 million job openings entered the US only registered for the second time in October.

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“Wage increases are probably on the agenda for next year. That’s part of the broadening of inflationary pressures that we’ve already started to see in some of that CPI data,” Seema Shah, chief strategist at Global Investors, told Yahoo Finance . Live on Thursday. “But I have to say we’re not too concerned because we’re starting to see other parts of the inflation picture really starting to fade. So at the end of next year, 12 months from now, we don’t expect the species to be 6-7% CPI numbers we can see tomorrow. We’re thinking more of the 3% level for 12 months.”

Against the backdrop of high inflation, Federal Reserve officials have adopted more aggressive rhetoric about future monetary policy. Some experts suggested there could be more rotation in US equity markets below the surface, as investors expect tighter Fed policies to keep inflation in check. The Federal Open Market Committee is holding its last two-day monetary policy-making meeting of the year next week.

“Going back to most of the second half of 2020 and much of this year, the risk-on, risk-off pendulum in the market really just found itself below the surface of the index, of the S&P 500 — meaning when there was a risk-on rally, it was value and it was cyclical,” Craig Fehr, director and leader of investment strategy for Edward Jones, told Yahoo Finance Live on Thursday. “And when it was risk-off and risk appetite declined, it was technology that was the safe haven.”

“What we’re seeing now is a transition, especially as the Fed signals a withdrawal of some of this excess liquidity and stimulus that has been in place for quite some time,” he added. “The market won’t run into high valuations right away, maybe technical names in general as it has for the past year and a half. I think we’ll see more discernment.”

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6:25pm ET Thursday: Stock Futures Open Higher

These were the key moves in the markets in late trading on Thursday:

• S&P 500 futures (ES = F): +6.5 points (+0.14%), to 4.673.50

• Dow futures (YM=F): +34 points (+0.1%), to 35,787.00

• Nasdaq futures (NQ = F): +25.25 points (+0.16%) to 16,174.00

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter