Futures lower, CPI ahead, JPMorgan to report – what’s moving markets

Futures linked to the major U.S. stock indices inch lower, with traders gearing up for crucial economic figures and the start of the quarterly corporate earnings season. The Trump administration faces blowback over an investigation into Federal Reserve Chair Jerome Powell, while oil prices rise as anti-government protests in Iran intensify.

1. Futures dip

U.S. stock futures pointed lower on Tuesday as investors hunkered down before the release of key inflation data and a slew of earnings from banking giants.

By 03:05 ET (08:05 GMT), the Dow futures contract had fallen by 46 points, or 0.1%, S&P 500 futures had dipped by 6 points, or 0.1%, and Nasdaq 100 futures had slid by 39 points, or 0.2%.

The main averages on Wall Street finished in the green on Monday, rebounding from pressure earlier in the session linked to the implications of a criminal investigation into Powell and President Donald Trump’s proposed cap on credit card rates.

But stocks were eventually buoyed by strength across a range of sectors, including technology, consumer staples and materials.

“Overall, the narrative is largely the same now as it was on Friday, with bulls still in control thanks to improving growth dynamics, healthy earnings, evidence of a generational improvement in productivity, and stimulus […] anticipation,” analysts at Vital Knowledge said in a note.

2. White House faces blowback over Powell probe

The Trump administration has faced a wave of criticism over its move to open the criminal investigation into Powell, with condemnation coming from both former Fed leaders and even members of the president’s Republican Party.

Citing sources familiar with the matter, Reuters reported that the probe was approved and started by Jeanine Pirro, the U.S. Attorney for Washington and an ally Trump, but without Attorney General Pam Bondi nor Deputy Attorney General Todd Blanche being briefed.

Writing on social media, Pirro said the Justice Department had chosen to take action against the Fed because the central bank had refused to discuss an overrun in expenses related to the refurbishment of its Washington headquarters. Pirro added that her office “makes decisions based on the merits.”

Yet the move, which cast fresh concerns over the independence of the Fed and sent U.S. Treasury bond rates higher, was slammed by former Fed Chairs Janet Yellen, Ben Bernanke and Alan Greenspan, who said “[t]his is how monetary policy is made in emerging markets with weak institutions.” They warned of the “negative consequences” such actions could have on inflation and the function of the economy more broadly.

Meanwhile, Republican Senator Thom Tillis was joined by several colleagues in hitting out at the investigation. Tillis described it as a “huge mistake.”

3. CPI ahead

With investors eyeing the developments around the Fed, attention now turns to the impending publication of the December U.S. consumer price index, a closely-monitored gauge of inflation.

Consumer prices in the world’s largest economy are seen rising by 2.7% in the twelve months to December, matching November’s rate. Month-on-month, the figure is also expected to equal November’s pace of 0.3%.

Stripping out more volatile items like food and fuel, so-called “core” CPI is forecast to accelerate slightly to 2.7% from 2.6% year-on-year, and to 0.3% from 0.2% on a monthly basis.

In a note, analysts at ING said they anticipate the core inflation figure will be hotter than expected, arguing that a prolonged U.S. government shutdown led to “more data collection occurr[ing] later in November, a period when Thanksgiving-related discounting is common.”

“Compared with the full month of November 2024, this timing likely skewed that inflation reading lower. Reverting to more standard collection timings in December means risks of a hotter read,” the ING analysts wrote.

Fed policymakers have recently prioritized a slowing jobs market over inflation when rolling out a series of interest rate reductions late last year. In theory, slashing rates can spur investment and hiring, albeit at the risk of reigniting prices.

Indications of sticky price gains could give Fed officials an extra factor to consider ahead of the next rate decision later this month. The Fed is widely tipped to keep rates unchanged at a range of 3.50% to 3.75%, according to CME FedWatch.

4. JPMorgan earnings loom large

Sentiment could also be swayed by a batch of results from major Wall Street lenders this week, beginning with the largest U.S. bank, JPMorgan Chase, on Tuesday.