Stock futures opened slightly lower Tuesday evening to hold below record levels, with investors fixing their attention on a key inflation report due for release Wednesday morning.
Contracts on the S&P 500 ticked down, after the index closed out its first session of losses following eight straight days of gains. The Dow and Nasdaq had each also ended the session lower to pause after a record-setting run-up.
One of the most closely watched reports due for release Wednesday morning will be the Labor Department's Consumer Price Index (CPI) for October. This report is expected to show consumer prices rose 5.9% in October compared to last year, accelerating from September's 5.4% year-over-year rate. If the report comes in as expected, it would represent the fastest annual rise in consumer inflation since 1990.
The staying power and magnitude of inflationary pressures has become a critical question for market participants, with companies across industries reporting rising input costs and price hikes in order to pass on these expenses and preserve margins. While third-quarter earnings results have showed that S&P 500 companies have largely been able to navigate these cost pressures, the possibility remains that lasting inflation could exert a greater impact, especially if consumers ultimately prove unwilling to pay higher prices.
"That's going to be one of the big things going forward, to see whether or not that consumer sentiment can bounce back, whether consumers will be resilient in the face of these price pressures, or whether they'll start to pull back a bit and decide they're going to hold off on spending and wait to see when prices come down or at least stabilize before they spend more in the new year," Yung-Yu Ma, BMO Wealth Management's chief investment strategist, told Yahoo Finance. "So that remains to be seen, and that is a big question mark as we go into 2022."
Inflation data so far has reflected still-elevated pressures in the recovering economy, even as Federal Reserve officials maintained that the supply-related factors creating these heightened costs would eventually wane. Tuesday's Producer Price Index from the Bureau of Labor Statistics showed that prices paid to producers jumped by a marked 8.6% in October compared to last year, representing the fastest rise in data extending back to 2010. And last week's October jobs report showed average hourly earnings jumped 4.9% last month compared to the same period last year, accelerating from September's 4.6% annual rise.
Meanwhile, a bevy of companies will report quarterly earnings results, including Disney (DIS), Bumble (BMBL), Wish (WISH) and Beyond Meat (BYND) after market close.
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6:02 p.m. ET Tuesday: Stock futures drift lower ahead of inflation data
Here's where markets were trading Tuesday evening:
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S&P 500 futures (ES=F): -3.75 points (-0.08%), to 4,674.50
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Dow futures (YM=F): -33 points (-0.09%), to 36,176.00
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Nasdaq futures (NQ=F): -16.5 points (-0.1%) to 16,196.25
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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