Stock futures are flat ahead of key May inflation report - CNBC

Traders work on the floor of the New York Stock Exchange (NYSE), May 3, 2023.

Brendan McDermid | Reuters

Stock futures were little changed in overnight trading after the S&P 500 and Nasdaq Composite each notched their highest close since April 2022. Wall Street also looked ahead to May's consumer price index, out Tuesday.

Oracle shares jumped 4% in extended trading after topping Wall Street's estimates for the fiscal fourth quarter. The company posted adjusted earnings of $1.67 per share on revenue of $13.84 billion.

Futures tied to the S&P 500 and Dow Jones Industrial Average futures traded flat. Futures connected to the Nasdaq Composite inched 0.2% higher.

Stocks capped off another positive session Monday as hope mounted that the Federal Reserve will skip a rate hike at its next policy meeting beginning Tuesday. The S&P 500 and Nasdaq Composite jumped 0.93% and 1.53%, respectively, to finish at their highest level in 13 months. The Dow Jones Industrial Average added 189.55 points, or 0.56%.

Ahead of the rate decision slated for Wednesday, market attention turns toward May's consumer price index report. Economists surveyed by Dow Jones expect inflation to show signs of easing, forecasting 0.1% month-over-month rise in prices, versus a 0.4% increase in April. On a yearly basis, economists expect a 4% jump.

The findings may cement the hope on Wall Street that sticky inflation is continuing to ease, and boost expectations for a rate skip already priced in by many. According to CME Group's FedWatch tool 78% of traders are betting on a pause. That said, another hike come July isn't out of the question.

A hotter-than-expected inflation print could, however, disrupt those plans, said Ed Moya.

"Inflation should be coming down given the trend with gasoline prices, a more seasonable rise in food prices, and the negative base effect," the Oanda senior market analyst said. "If the U.S. economy is dealt a hot report, the Fed may have to debate delivering one more rate hike and possibly signal they might need to stand ready to do more."

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