Stock Futures Rise Slightly as Inflation Data Dampens Rate Cut Hopes

U.S. stock index futures edged higher Wednesday evening as investors processed a hotter-than-expected consumer inflation report, reducing the likelihood of near-term interest rate cuts. Wall Street ended mostly lower following the inflation data, though strong corporate earnings helped limit losses. However, concerns over trade tariffs under former President Donald Trump kept markets in a tight range.

By 18:35 ET (23:35 GMT), S&P 500 Futures inched up 0.1% to 6,078.50, while Nasdaq 100 Futures rose 0.2% to 21,855.0. Dow Jones Futures gained 0.1% to 44,507.0.

January’s Consumer Price Index (CPI) data came in hotter than anticipated, reinforcing expectations that the Federal Reserve will keep interest rates unchanged in the near term. Fed Chair Jerome Powell, speaking before Congress, reaffirmed that rate cuts would only come once inflation clearly moves toward the 2% target. The Fed has already cut rates by 1% in 2024 but remains cautious due to a strong labor market and economic resilience.

Meanwhile, Trump has pledged to curb inflation, blaming the Biden administration. However, analysts warn that his recent 25% tariffs on steel and aluminum imports, along with potential reciprocal tariffs, could drive inflation higher in the coming months.

Wall Street ended lower Wednesday, with the S&P 500 slipping 0.3% to 6,051.92, the Dow falling 0.5% to 44,368.68, and the Nasdaq Composite finishing flat at 19,649.95. Despite market weakness, earnings from CVS Health (NYSE:CVS) and Gilead Sciences (NASDAQ:GILD) provided some support, with CVS soaring 15% and Gilead jumping 7.5%. Robinhood (NASDAQ:HOOD), MGM Resorts (NYSE:MGM), Applovin (NASDAQ:APP), and Dutch Bros (NASDAQ:BROS) also posted strong gains post-earnings.

Persistent concerns over high rates, inflation, and trade policy uncertainty continue to weigh on investor sentiment.