Wall Street turned slightly lower before the open Wednesday as the Federal Reserve awaits final inflation data before its meeting next week. Most expect the U.S. central bankers to approve a rate cut.
The future of S&The P 500 was down about 0.1% in pre-market trading, while Dow Jones Industrial Average futures were down 0.3%.
The Fed is shifting its focus away from curbing high inflation and toward protecting the labor market and the broader economy. It is unclear how much the Fed will cut the federal funds rate, which is at a 20-year high.
The US inflation report coming out this week could have implications for the Fed’s expected rate cut size. The Fed’s worst-case scenario is that inflation re-accelerates just as the jobs market weakens, because addressing both problems requires conflicting moves.
Economists expect U.S. consumer prices to have risen 2.6% year-over-year in August, down from 2.9% inflation in July, according to the inflation report.
On Thursday, the government shares the latest data on wholesale inflation before it is passed on to consumers.
Investors were also watching to see how Tuesday night’s debate between U.S. presidential candidates Vice President Kamala Harris and former President Donald Trump might impact the market.
Trump attacked Harris for the inflation seen under the Biden-Harris administration, which was a major burden for the vice president, but he quickly turned his response to warnings about immigrants coming to the U.S., one of his main campaign issues.
President Trump has argued that the tariffs he proposed are a way to make other countries pay for the imbalances that harm the U.S. Harris has called the tariffs effectively a national sales tax.
There was little sign on Wednesday that the debate was having an impact on broader financial markets, but Trump Media stocks & The technology group fell a whopping 12% in pre-market trading.
Bitcoin and other cryptocurrencies (including those Trump has championed in recent weeks and his own crypto company) were down slightly on Wednesday, with Bitcoin down 1.5% at $56,725.
In another stock trade, Dave & Buster’s, a restaurant and arcade chain, rose about 13% after easily beating Wall Street analysts’ profit targets. The loser was video game retailer GameStop, one of the original “meme stocks.” Shares plunged more than 9% after the company missed revenue estimates by a wide margin, with sales down nearly a third from the same period a year ago.
Elsewhere in Europe, France’s CAC 40 was up 0.3% by midday, Germany’s DAX was up 0.5% and Britain’s FTSE 100 was up 0.2%.
In forex trading, the US dollar fell from 142.41 yen to 141.69 yen. The euro rose from 1.1023 dollars to 1.1050 dollars.
The U.S. dollar fell to 140 yen at one point after comments from a Bank of Japan official were quoted in the Japanese press, suggesting the central bank is preparing to raise interest rates, a move that has been expected for some time.
Japan’s benchmark Nikkei 225 fell 1.5% to 35,619.77, while Australia’s S&The P/ASX 200 fell 0.3% to 7,987.90.
South Korea’s Kospi fell 0.4% to 2,513.37, as data showed the seasonally adjusted unemployment rate would fall to 2.4% in August 2024 from 2.5% in July, the lowest level in a year, as the number of unemployed people declines.
Hong Kong’s Hang Seng Index fell 0.7% to 17,108.71, while the Shanghai Composite Index fell 0.8% to 2,721.80.
In energy trading, benchmark U.S. crude rose $1.55 to $67.30 a barrel. International standard Brent crude rose $1.46 to $70.65 a barrel.
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