Wall Street futures retreat from highs, focus on economic data

Stock index futures USA fall this Tuesday after the rebound in Wall Street in recent days following the election results, as investors awaited key inflation data due later in the week for further signals on the country’s economic and monetary policy outlook.

All three major indices closed at record highs in the previous session as investors mostly expect the president-elect’s proposed tax cuts donald trump and expectations of easier regulatory policies help stocks.

Some stocks that were expected to perform well under Trump gave up gains. Electric vehicle maker Tesla, which is up nearly 40% since Nov. 5, fell 1% in premarket.

Futures tracking the Russell 2000, which measures small-cap stocks, fell 0.6% after the index closed at a three-year high on Monday. Trump Media & Technology Group lost 4.7%.

Wall Street awaiting key data

Some cryptocurrency stocks fell after rising in recent sessions, even as bitcoin approached the $90,000 mark. Bitcoin miners MARA Holdings and Riot Platforms fell 1.4% and 2.5%, respectively.

Attention will now turn to consumer price inflation data, due on Wednesday, the first of several batches of data this week that will guide the US Federal Reserve’s policy path.

Markets have already lowered expectations for interest rate cuts next year, given strong economic data and the potential inflationary impact of some of Trump’s policies.

Traders continue to price in a strong probability, nearly 69%, of a 25 basis point interest rate cut at the Federal Reserve’s December meeting, according to CME FedWatch.

“We currently expect the Federal Reserve to implement another 25 basis point cut in December, although this forecast is subject to good inflation data between now and December 18,” said John Velis, Americas macro strategist at BNY.

“The December meeting will be the last before the new administration takes office, after which economic policy could radically change the outlook for inflation and growth, generating a new set of calculations for the FOMC.”

Federal Reserve officials Christopher Waller, Thomas Barkin, Neel Kashkari and Patrick Harker are expected to speak later in the day.

Dow E-minis futures fell 67 points, or 0.15%, S&P 500 E-minis futures fell 7.75 points, or 0.13%, and Nasdaq 100 E-minis futures lost 17 .25 points, or 0.08%.

Large-cap tech stocks lost ground, with Nvidia down 0.3%, Alphabet losing 0.1% and Meta Platforms falling 0.4%, as Treasury yields rose across the board. Most megacaps closed lower on Monday.

Investors were also keeping an eye on the possibility of a “Red Sweep,” with one data provider projecting that the GOP had won the majority in the U.S. House of Representatives, which would indicate that Republicans would have the majority in both houses of Congress.