Stock futures flat with all eyes on key inflation report

After December fire, markets bullish, says Ritholtz's Josh Brown

Equity futures were little changed in overnight trading on Wednesday as investors awaited a key inflation report to gauge the prospects for the Federal Reserve’s rate hike campaign.

Futures contracts linked to the Dow Jones Industrial Average rose 12 points. S&P 500 and Nasdaq 100 futures were both flat.

All eyes are on the consumer price index for December, with consensus forecasts calling for a slight easing of price pressures.

Economists expect the consumer price index to fall 0.1% in December but rise 6.5% year-on-year, from a monthly gain of 0.1% in November and an annual rate of 7.1%, according to Dow Jones. The CPI is well below the record high of 9.1% in June.

Excluding food and energy prices, economists expect December’s CPI to be 0.3% higher than the previous month and 5.7% higher than a year ago .

“Inflation should continue to decline, which will end the Fed’s rate hikes this spring, control interest rates and boost corporate earnings,” said Jeff Buchbinder, chief equity strategist at LPL Financial, in a note.

Stocks rallied ahead of the inflation report on Wednesday as investors bet the Fed could slow its rate hikes in light of more subdued prices. The Dow Jones climbed more than 260 points, while the S&P 500 gained 1.3%, with all 11 sectors ending the day higher. The tech-heavy Nasdaq Composite rose 1.8% on Wednesday, marking a four-day streak.

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