US stock futures largely flat before key inflation data; meme stocks rally

Investing.com– U.S. stock index futures traded largely unchanged Tuesday, as investors cautiously awaited the release of key inflation readings that could influence future Federal Reserve monetary policy. 

At 06:15 ET (10:15 GMT), were up 12 points, or 0.1%, while and traded largely unchanged. 

This calm trading in U.S. futures followed a similar session on Wall Street, in anticipation of more cues on interest rates from inflation readings later Tuesday and on Wednesday. 

The closed flat, the fell 0.2%, its first losing session in nine, while the rose 0.3%. 

Wall Street calm ahead of PPI, CPI data 

Investors are focusing squarely on the later in the session, and the more closely watched on Wednesday, for clues over when the Fed thinks it prudent to start cutting interest rates to boost the economy.

These readings come after inflation remained largely sticky through the first quarter, dashing expectations of early interest rate cuts this year. Any signs of inflation remaining sticky through April are likely to further diminish expectations of rate cuts – a trend that could spark losses in stocks.

A string of Federal Reserve officials have warned in recent weeks that the central bank was in no hurry to begin cutting rates, and needed more confidence that inflation was moving back towards its 2% annual target. 

That said, expectations over interest rate cuts have made investors the “most bullish” since November 2021, Bank of America’s monthly fund manager survey for May showed on Tuesday.

The survey of global fund managers with $562 billion in asset under management found 82% expect the first by the rate cut by the Federal Reserve in the second half, while 78% say a recession is unlikely over the next 12 months.

GameStop extends rally 

One sector of the market which has seen volatile trading has been the so-called meme stocks, with videogame retailer GameStop (NYSE:) the prime example.

GameStop stock rose over 40% premarket after a 74% rally during Monday’s session.

Fueling the jump was the first post on X.com in three years from “Roaring Kitty”, an account linked to a financial markets commentator and social media influencer Keith Gill. Gill, also known as “Deep F***ing Value” on forum website Reddit, became a figurehead of a frenzy of trading in so-called “meme stocks” like GameStop and theater chain AMC Entertainment (NYSE:) in 2021.

AMC and headphones maker Koss Corporation (NASDAQ:) shares also rose sharply.

The “Roaring Kitty” account posted a series of well-known internet memes, including an image of a man leaning forward in a chair that is used to signify the growing seriousness of a situation. “Roaring Kitty” also posted a collection of other memes, although none of them mentioned GameStop or other stocks.

Elsewhere, Kraft Heinz (NASDAQ:) is exploring a sale of its Oscar Mayer meats business that could fetch anything between $3 billion to $5 billion, the Wall Street Journal reported on Monday, while Bloomberg reported that Apple (NASDAQ:) is gearing up to sell its Vision Pro mixed-reality headset outside the United States.

Crude largely flat after earlier gains 

Crude prices were muted Tuesday, after posting strong gains in the prior session as wildfires in Canada run the risk of disrupting the country’s oil supply.

By 06:15 ET, the U.S. crude futures traded 0.1% higher at $79.16 per barrel, while the Brent contract climbed 0.1% to $83.44 a barrel.

Both contracts rose more than 1% each on Monday.

Major wildfires have spread across Western Canada, presenting the potential for disruptions in Canadian oil and gas supplies, especially as they neared a key oil hub in Fort McMurray, Alberta.

The city is the closest settlement to Canada’s biggest oil-sands operations, and had in 2016 suffered severe damage from wildfires, knocking around 1 million barrels per day out of commission at the time.

(Ambar Warrick contributed to this article.)