U.S. stock futures gained Monday as Wall Street inched closer to highly-anticipated inflation data this week.
Futures tied to the S&P 500 and tech-heavy Nasdaq Composite each climbed 0.5%, while futures on the Dow Jones Industrial Average rose by 0.4%, or 125 points.
In commodities, oil prices nudged higher, extending a streak of recent back-and-forth action. West Texas Intermediate (WTI) and Brent crude oil futures each rose roughly 1% to $87.67 per barrel and $93.86 per barrel, respectively.
All eyes are on the August Consumer Price Index (CPI) due out before markets open on Tuesday.
Economists surveyed by Bloomberg expected headline CPI rose 8.1% over the prior year in August, a moderation from an 8.5% increase seen in July. On a month-over-month basis, CPI is expected to show prices fell 0.1% from July to August, primarily due to continued easing in energy prices. If realized, this would mark the first monthly decline since May 2020.
Core CPI, which strips out the volatile food and energy components of the report and is closely tracked by the Fed, is likely to have inched higher in August, rising 6.1% over the same month last year, more than the 5.9% year-on-year increase seen in July.
The reading will likely affirm to investors whether the Federal Reserve raises interest rates by 0.50% or 0.75% at its policy meeting later this month.
In recent weeks, Fed policymakers have doubled down on the U.S. central bank’s commitment to proceeding with restrictive monetary policy for as long as necessary to restore price stability.
Federal Reserve Governor Chris Waller said at a conference in Vienna, Austria on Friday that he supports a “significant” increase in the benchmark interest rate at the Fed’s Sept. 20-21 meeting.
“I expect it will take some time before inflation moves back to our 2 percent goal, and that the FOMC will be tightening policy into 2023,” Waller said. “The policy rate will have to move meaningfully above this neutral level to further restrain aggregate demand and put more downward pressure on prices.”
CME Group’s Fedwatch tool places the probability for a bump of three quarters of a percentage at 90%, up from 69% two weeks ago.
A list of Wall Street institutions have also raised their bets on a 75 basis point hike this month including Bank of America, Goldman Sachs, and Nomura.
Elsewhere in markets, Twitter (TWTR) was in focus after the social media platform responded to a Sept. 9 letter from Elon Musk indicating the company intends to enforce the merger agreement and demanded that Musk and his team comply with the terms of the deal. Shares were down about 1% in pre-market trading.
Disney (DIS) was also in focus early Monday after activist investor Dan Loeb apparently walked back on a recent push for the company to sell or spin off the ESPN. Loeb’s hedge fund Third Point Management said in August that it purchased a $1 billion stake in Disney.
“We have a better understanding of ESPN’s potential as a standalone business and another vertical for Disney to reach a global audience to generate ad and subscriber revenues,” Loeb said in a tweet Sunday after Disney CEO Bob Chapek vowed to “restore ESPN to its growth trajectory.”
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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