Dow futures tumble lower ahead of inflation data and impeachment vote

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Stock index futures fell slightly Wednesday as investors await inflation data and a House vote to impeach President Donald Trump a week before he leaves office. Dow Jones YM00 industrial average futures, -0.18%, were down 55 points, or 0.2%, at 30,919. S&P 500 ES00 futures, -0.27%, were down 10.50 points, or 0.3%, at 3,784. Nasdaq-100 NQ00 futures, -0.20%, fell 25.75 points, or 0.2%, to 12,864.50. Stocks struggled for direction on Tuesday, switching between modest gains and losses before ending higher, allowing Dow DJIA, + 0.19%, S&P 500 SPX, + 0.04% and Nasdaq Composite COMP, + 0.28% to avoid their first. Receding losses from 2021. What is driving the market? A sell-off in the Treasury market has lifted yields, marking a potential headwind for stocks. The yield on the 10-year Treasury note TMUBMUSD10Y, 1.129% last week surpassed the 1% level, as the expectations of President-elect Joe Biden and a Democrat-controlled Congress will fuel another large round of aid spending that could generate significant inflationary pressures. That, in turn, could push the Federal Reserve back on its aggressive monetary stimulus measures.

Investors focused on inflation can focus on the December Consumer Price Index, or CPI, at 8:30 a.m. ET. Economists surveyed by MarketWatch expect the CPI to show a 0.4% increase, while the index minus volatile food and energy prices is estimated at 0.1%. “If today’s CPI data surprise to the upside, it can certainly cause problems for stocks as US yields rise further,” said Boris Schlossberg, managing director of BK Asset Management, in a note. That’s because the stock market recovery has been based on ultra-low rates, which allow for much higher valuations, he said. And although rates remain historically low, “markets are always a relative rather than an absolute game and even a 50 basis point increase from a 1% level represents a 50% increase in rates that could then cause massive speculative flows of money. stocks, especially those with high multiples, “Schlossberg said, referring to the price-earnings ratio. Investors have largely looked beyond renewed political grudge. The Democratic-controlled House was expected to vote Wednesday to impeach Trump. for his role in encouraging a violent mob last week to attack the Capitol. A handful of House Republicans, including Wyoming’s Liz Cheney, No. 3 in the House Republican leadership, have said they would vote for a trial The fate of the impeachment push in the Senate, where a two-thirds majority would be needed to convict and remove the president, is unclear. rme of the Federal Reserve’s Beige Book, a compilation of economic anecdotes, to be delivered at 2 p.m. Various Fed officials will also make comments Wednesday, including Governor Lael Brainard at 1 p.m. and Vice President Richard Clarida at 3 p.m. What companies are in focus? Regeneron Pharmaceuticals Inc. REGN, + 0.56% of shares rose in pre-market trading after the company said Tuesday night that the US government agreed to buy an additional 1.25 million doses of the antibody cocktail COVID-19 from the company. DocuSign Inc. DOCU shares, + 9.00%, fell after the electronic signature company announced the price of an expanded offering of convertible notes.