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US stock index futures dipped on Wednesday, with investors pricing in greater odds of Democrat Kamala Harris prevailing in the upcoming presidential elections, while focus moved to a key inflation reading later in the day.
Investors have for weeks been adjusting their expectations around the Federal Reserve’s policy meeting next week and the inflation data could feed into those.
But the US presidential debate, in which Harris put her Republican rival Donald Trump on the defensive late on Tuesday, was driving sentiment, analysts said.
Wall Street remained on edge as the debate offered investors little clarity on key policy issues, even as betting markets swung in Harris’ favour after the event.”
Relative to Trump, we see Harris’ policies as less fiscally expansionary, less focus on tax cuts,” noted Jefferies’ chief Europe economist Mohit Kumar.
After the debate, pricing for a Trump victory slipped by 6 cents to 47 cents on online betting site PredictIt, while climbing to 57 cents from 53 cents for a Harris win.
Shares of Trump Media & Technology Group, Trump’s media firm, slid 15,2 percent in premarket trading.
Yields on US government bonds fell across the curve, with the yield on the 10-year note last at 3,6068 percent, its lowest level in more than a year.
Other traditional safe-haven assets such as the Japanese yen and Swiss franc also rose, while the dollar index came under pressure.
Later in the day, focus will be on a reading of August consumer price inflation (CPI), with headline inflation expected to ease to 2,6 percent year-on-year, while the “core” figure, which excludes volatile components like food and energy, is expected to remain unchanged at 3,2 percent annually.
This will be followed by the producer prices report on Thursday.
Traders are all but convinced that the Fed will cut interest rates when it meets on September 17-18, with 67 percent tilted toward a 25-basis point cut, according to CME’s FedWatch Tool. – Business Insider Africa
Bongani Ndlovu
Online Reporter