U.S. equity futures are pointing to a mildly higher open on Tuesday, as investors react positively to a benign inflation reading and look to extend the late-session rebound seen on Monday.
Futures edged up after the U.S. Labor Department released its December consumer inflation figures. The data showed headline prices rising as expected, while underlying inflation came in slightly cooler than economists had forecast.
The consumer price index increased by 0.3% in December, matching consensus estimates. When food and energy costs are excluded, core prices rose 0.2% over the month, undershooting expectations for a 0.3% gain.
On a year-on-year basis, headline inflation held steady at 2.7% in December, unchanged from November and in line with forecasts. Core inflation was also unchanged at 2.6%, despite expectations that it would tick up to 2.7%.
The report has reinforced optimism around the interest-rate outlook ahead of the Federal Reserve’s policy meeting later this month.
Wall Street endured a choppy session on Monday, with stocks initially moving lower before staging a broad recovery. The main indices rebounded strongly from their intraday lows and finished in positive territory, with the Dow Jones Industrial Average and the S&P 500 notching new record closing highs.
Although gains were trimmed slightly into the close, the overall tone remained constructive. The Dow added 86 points to end at 49,590, the Nasdaq rose 63 points to 23,734, and the S&P 500 advanced nearly 11 points to 6,977.
Early selling pressure reflected unease over the Federal Reserve’s independence after Chair Jerome Powell disclosed that the central bank had been served with subpoenas from the Department of Justice, carrying the threat of criminal charges.
“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June,” Powell said in a video statement released by the Fed on Sunday. “That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.”
According to U.S. media reports, federal prosecutors have opened a criminal investigation into Powell over his testimony to Congress regarding a $2.5 billion renovation program involving three buildings, including the Fed’s headquarters.
Powell described the development as “unprecedented” and linked it to sustained pressure from President Donald Trump to push the Fed toward lower interest rates. He emphasized his respect for the rule of law and accountability, while noting that the Fed’s leadership is not above legal scrutiny.
“Trump wants to lower borrowing costs, so consumers and businesses spend more money and propel the economy,” said Russ Mould, investment director at AJ Bell.
He added, “However, what’s worrying markets now over Trump’s implied intervention is that the loss of Fed independence could lead to inflation getting out of control.”
As the session progressed, investors appeared to look past the political noise, refocusing on monetary policy expectations. While the Fed is widely expected to leave rates unchanged at its upcoming meeting, markets still anticipate at least one further quarter-point cut later this year.
From a sector perspective, computer hardware stocks led the gains, with the NYSE Arca Computer Hardware Index surging 5%. Gold-related shares also rallied sharply, buoyed by a jump in bullion prices, pushing the NYSE Arca Gold Bugs Index up 3.5%.
Steel and networking stocks also advanced, while airline and oil services shares lagged the broader market.
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