US pre-open: Markets to tread water ahead of CPI data

(Sharecast News) - US stock markets were poised for a muted start on Wednesday, with futures lower across the board as investors cautiously waited for US inflation data - which could provide some insight into how the Federal Reserve may adapt its approach to monetary policy in the coming months. In pre-market trade, futures on the Dow, S&P 500 and Nasdaq were all pointing to losses of around 0.2%.

On the whole, economists expect the Fed to hold steady with interest rates for now - and potentially start to bring rates down some time next year - with recent data pointing to slowing economic growth and potentially an easing in inflation forecasts.

Headline consumer price inflation is expected to have picked up from 3.2% in annual terms for the month of July to 3.6% in August due to rising energy quotes. At the core level, however, consensus is that CPI gains slowed from 4.7% to 4.3%.

According to Fed funds futures, the U.S. central bank is likely done with interest rate hikes, but not all economists are yet convinced.

"The US inflation report looks to dominate today, as markets look for a second consecutive upward push for prices," said analyst Joshua Mahony from Scope Markets. "Consternation over a potential second peak for inflation may not be too justified for now, given that these two months were expected to see headline inflation rise thanks to base effects. There is hope that a decline in core inflation would help offset any risk-off sentiment that might come in the event of a headline CPI rise."

In corporate news, Apple was trading lower pre-market and looks to extend losses made the previous session despite it unveiling an array of new products during its annual marketing event, Wanderlust. Among those were the iPhone 15, the latest Apple Watch, and new versions of AirPods. In a significant pricing move, Apple announced an increase in the price of its premium iPhone, which could raise the average cost of the device beyond the $1,000 mark.

Apple shares have been under pressure over the past week on reports that China is banning government officials and state agencies from using iPhones at work. However, Beijing came out on Wednesday to confirm it hadn't released an official regulations on the use of foreign devices.