In its monthly report on Tuesday, the Organization of the Petroleum Exporting Countries cut its forecast for world oil demand growth in both 2024 and 2025, mostly due to weakness in top oil importer China.
U.S. stock index futures are slightly down as the post-election rally takes a breather, with all eyes on the upcoming Consumer Price Index (CPI) data release, which could impact the Federal Reserve’s next move on interest rates. By early Wednesday, Dow Jones Futures, S&P 500 Futures, and Nasdaq 100 Futures each slipped about 0.1%. This pause comes after declines on Tuesday, where investors appeared to lock in gains from last week’s rally following Donald Trump’s election win.
Key Highlights
- Upcoming CPI Data and Fed Outlook
- The CPI report, set for release later Wednesday, could reveal inflation at an annualized 2.6%, up from September’s 2.4%, with monthly growth expected to remain steady at 0.2%.
- Core inflation, excluding volatile items, is projected at 3.3% year-over-year. This data could influence the Fed’s decision on rate adjustments. Currently, the market sees a roughly 60% chance of a 25-basis point rate cut in December, while 40% believe rates will remain unchanged.
- Market Movers
- Rivian Automotive (RIVN) saw a significant pre-market jump of 14% after announcing a new investment round with Volkswagen.
- Spotify (SPOT) gained nearly 6% following positive subscriber growth in Q3 and a strong annual forecast.
- CAVA Group (CAVA) surged 17% after reporting better-than-expected third-quarter results.
- Skyworks Solutions (SWKS), however, dropped almost 6% after its Q1 guidance fell short of market expectations.
- Oil Market Update
- Oil prices saw a mild recovery Wednesday after substantial losses earlier this week, driven by OPEC’s downward revision of global oil demand growth, citing China’s economic slowdown. Brent and WTI crude prices edged up by around 0.7% and 0.8%, respectively.
This market context reflects investor anticipation of the CPI’s influence on Fed policy, coupled with sector-specific movements driven by corporate news, particularly in the EV, tech, and energy industries. The CPI’s influence on bond yields and Fed decision-making could be a focal point for traders monitoring both inflationary pressures and the broader economic outlook.
