US stocks pulled back from record highs on Wednesday as investors waited for a reading on the Federal Reserve’s favorite inflation gauge to provide clues to the path of interest rates.
S&P 500 futures () slipped roughly 0.2%, while Dow Jones Industrial Average futures () were little changed, coming off fresh all-time highs for the indexes. Contracts on the tech-heavy Nasdaq 100 () fell 0.3%.
The mood is muted in the wind-down to the Thanksgiving holiday, which will see markets shut on Thursday and close early on Friday. But the Fed is taking the fore again after being eclipsed somewhat by debate over the impact of Donald Trump’s tariff plans and cabinet choices.
The October print of its preferred inflation gauge, the Personal Consumption Expenditures index, is due for release on Wednesday morning. Focus is on whether inflation has stalled, as some officials believe, and minutes from the Fed’s last meeting suggested a cautious stance on interest-rate cuts.
Economists expect annual “core” PCE — which excludes food and energy — to have clocked in at 2.8% in October, up from the 2.7% seen in September. A print matching those expectations will likely weigh on bets for a rate cut in December. Traders currently see a roughly 34% chance the Fed holds rates steady at that meeting, up from a roughly 24% a month before, per the CME FedWatch Tool.
Updates on third-quarter GDP, durable goods data, and initial jobless claims are also on the economic docket.
Questions about whether Trump’s agenda will heat up price pressures are also in play for the Fed, some analysts believe, though policymakers aren’t able to speak openly on the debate.
Trump on Tuesday tapped Jamieson Greer — a veteran of his first term — as US trade representative. Given Greer was heavily involved in Trump’s original China tariffs, Wall Street is assessing what his role could mean for the big new tariffs promised for the US’s top trading partners.
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