U.S. stock futures advanced on Wednesday following Tuesday’s mixed close. Futures of all four major indices rose in premarket trade.

Traders await the December Consumer Price Index will provide fresh insights into inflation’s trajectory, potentially influencing the Federal Reserve's policy stance amid mounting uncertainty over interest rates.

The headline inflation rate is projected to rise 2.9% year-over-year, according to TradingEconomics, marking an increase from November’s 2.7% pace. On a monthly basis, headline inflation is expected to grow by 0.3%, maintaining the same pace as the prior month.

Amid rotation, technology stocks dragged the Nasdaq down on Tuesday as well, whereas Dow Jones, which has the least number of tech constituents, rose over 220 points.

Cues From The Last Session

U.S. stock market closed with a mixed performance on Tuesday. The Dow Jones Industrial Average saw a significant intraday surge following the release of Producer Price Index data.

PPI increased by 0.2% in December, lower than the expected 0.3% and November’s 0.4% increase. This positive economic indicator boosted investor sentiment.

However, Big Tech stocks weighed heavily on the Nasdaq. Nvidia Corp. (NASDAQ:NVDA) and Meta Platforms Inc. (NASDAQ:META) experienced notable declines, contributing to the index’s negative performance.

Sectoral performance was varied across the S&P 500. Utilities, materials, and financial sectors closed higher, while communication services and healthcare sectors underperformed.

Insights From Analysts

Howard Marks, a veteran investor who accurately predicted the dot-com bubble, warns of potential market risks in his latest memo, “On Bubble Watch.”

Marks highlights several concerning signs:

While not definitively declaring a bubble, the co-founder and co-chairman of Oaktree Capital Management, Marks stresses the importance of acknowledging these risks. He acknowledges counterarguments, such as reasonable valuations for the “Magnificent Seven” and a moderate P/E ratio for the S&P 500.

Ultimately, Marks concludes that the market may be expensive and slightly overheated, but it doesn’t yet display the irrational exuberance typical of a true bubble.

“The markets are likely to remain listless until Monday’s Inauguration Day, when President Donald Trump is expected to issue numerous Executive Orders which might muddy rather than clarify the economic outlook,” said Ed Yardeni of Yardeni Research in his QuickTakes.

Carson Research in their 2025 markets outlook, released on Tuesday said that they expect U.S. growth likely to outpace other global economies this year. They expect a 12-15% return from stocks.

“Looking at forward 12-month S&P 500 earnings we once again see new highs, now at $271 per share, up from $225 in early 2023,” the report said.

“We are overweight equities and believe current forward earnings growth expectations remain supportive of stock gains given the economic backdrop.”

See Also: How to Trade Futures

Upcoming Economic Data

Stocks In Focus:

Commodities, Gold And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 0.62% to hover around $76.84 per barrel.

The gold spot index was up by 1.04% to $2,710.19 per ounce. The Dollar Index was down 0.20% at 109.050 level.

Asian markets closed mixed on Wednesday as Hong Kong’s Hang Seng, and India’s S&P BSE Sensex index advanced. Whereas, China’s CSI 300, Australia’s ASX 200, Japan’s Nikkei 225, and South Korea’s Kospi index fell. European markets were also trading higher.

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