(Bloomberg) -- US equity-index futures fluctuated between gains and losses as investors debated whether inflation had eased enough to encourage the Federal Reserve to slow monetary tightening.
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Contracts on the S&P 500 and Nasdaq 100 index rose about 0.1% each after Tuesday’s rally in US stocks on the back of a fifth month of decline in consumer-price growth. Treasuries rallied for a second day, while the dollar slipped. The Stoxx Europe 600 Index dropped for the second time in three days. Charter Communications Inc. declined 5.8% in premarket New York trading amid concern its capital-spending plan may crimp cash flow.
While a softer-than-expected figure for US consumer price index stoked a rally across stocks and bonds, the gains were tempered by caution that the Fed may still remain resolute on continuing rate hikes. After a 50 basis-point increase in Fed’s policy rate later Wednesday was firmly priced in, traders remained on the edge over what signals policymakers may offer on when the hikes will stop and whether a rate cut is possible next year.
“The question is, with inflation still at generational highs, will the Fed walk through that door?” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. “After an initially high-spirited response, the relatively muted reaction for stocks is likely attributable to pre-risk event positioning, prevailing bearish growth sentiment, technical factors and the devil in the details.”
Europe’s equity benchmark fell after posting the biggest single-day advance since Nov. 10 as caution prevailed over Fed’s messaging later in the day as well as expectations for rate hikes by the European Central Bank and Bank of England on Thursday.