Nasdaq 100: Futures Rise as Traders Eye CPI Data and Bet on Fed Rate Moves

Futures Tick Up Ahead of CPI, PPI as Traders Eye Fed Pivot Clues

U.S. equity futures edged higher early Monday, with traders positioning cautiously ahead of a week dominated by inflation data that could influence the Federal Reserve’s next move. Following Friday’s soft jobs report, which revived hopes for rate cuts, attention now shifts to Wednesday’s PPI and Thursday’s CPI prints.

With the S&P 500 sitting less than 1% below record highs, and the Nasdaq Composite and Dow Jones Industrial Average tracking similarly close to their peaks, markets are balancing optimism around easing labor pressure with concern that sticky inflation could keep the Fed sidelined longer than hoped.

Can CPI and PPI Data Unlock a Fed Rate Cut?

August’s core CPI is expected to rise 0.3% month-over-month. Traders will scrutinize the release to assess whether disinflation is stalling—critical for rate-sensitive sectors like tech and real estate. A cooler print could revive dovish bets, especially after the jobs data increased speculation of a possible 50-basis-point cut later this month.

Deutsche Bank noted that CPI will likely do the heavy lifting in setting near-term rate expectations, given the Fed’s current blackout period. Meanwhile, employment data revisions due Tuesday could reinforce the argument that the labor market is softer than the Fed recognizes.

How Are Treasury Yields Setting the Tone for Equities?

Bond yields held steady Monday, with the 10-year at 4.084% and the 2-year near 3.499%. These levels matter for equities—especially growth names—since a retreat in yields could support valuations by reducing the discount rate applied to future earnings.

Last week’s brief spike above 5% on the 30-year rattled investor nerves, highlighting how quickly fiscal concerns and inflation risk can push long-end yields higher. With Standard Chartered seeing 30-year yields capped near 5.1%, traders may interpret any downside in yields post-CPI as a green light to rotate back into risk assets.

Why Oil’s Bounce May Pressure Consumer Stocks

Crude oil prices climbed more than 1.8% early Monday, as OPEC+’s modest October production increase underwhelmed markets and fresh U.S. sanctions on Russian crude gained traction. Brent hit $66.66 and WTI touched $62.96, bouncing from last week’s decline.

For equities, rising oil prices act as a double-edged sword. Energy stocks may benefit, but higher fuel costs could squeeze margins in consumer discretionary and transport sectors. A continued rise in crude could also complicate the inflation picture, keeping pressure on the Fed to stay restrictive.

Market Setup: CPI in Focus, Yield and Crude Sensitivity Rising

With futures modestly higher and the S&P 500 near all-time highs, positioning remains fragile. CPI and PPI prints will be pivotal in shaping rate expectations. If inflation surprises to the upside, watch for renewed pressure on bond yields and a potential pause in the equity rally. On the flip side, softer data could drive a re-rating in growth stocks and lift risk sentiment broadly.

More Information in our Economic Calendar.