Stock Market Today: Stocks edge lower with key CPI inflation data on deck

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U.S. equity futures edged lower in early Wednesday trading, while Treasury yields moved higher and the dollar steadied, as investors looked to a key inflation reading that will accelerate repricing of the so-also referred to as 'Trump Trade' and test the market's solid post-election rally.

Stocks ended lower across the board Tuesday, with the S&P 500 passing the 6,000 point market in early trading only to present back all of those gains and end 0.3% lower on the session a surge in Treasury bond yields blunted risk appetite.

Benchmark 10-year note yields climbed 12 basis points from late Friday levels, and were last marked at four.422% in early New York dealing, as markets adjusted for the President-elect Donald Trump's sweeping election victory and the impact of his trade, tax and spending policies on US. borrowing costs.

That adjustment will get yet one more tweak for the time being time with the publication of the Commerce Department's October CPI inflation report, which is expected to indicate further increases in both core and headline prices pressures that will challenge market bets on an end-of-year rate cut from the Federal Reserve.

The CME Group's FedWatch tool pegs those odds at around Sixty two%, down from as high as 85% last month, and a hot inflation reading might pare that even further as the economy continues to outperform forecasts over the ultimate months of the year.

"Following the election there are also questions as to the extent and timing of the Trump administration's tariff agenda and the next effect on prices and inflation, which might impact the dollar," said Quincy Krosby, chief global strategist for LPL Financial.

"Inflation-related data releases take on heightened importance as markets are trying and ascertain whether the Fed can, absent weakness within the labor market, deliver the rate cut cycle it had expected just a couple of months ago - and whether the already extended market can withstand the possibility that the Fed might remain higher for longer," she added.

Stocks are also facing concern that the post-election runup has stretched overall market valuations, with the S&P 500 now trading at a 22.2x multiple to forward 12-month earnings projections, a level that will prove demanding to appear after if the economy slows, profit growth tapers and inflation reaccelerates.

It is weighing on futures heading into the start of the trading day on Wall Boulevard, with the S&P 500 also referred to as sixty eight points lower from last night's close and the Dow Jones Industrial Average priced for a sixty five point pullback.

The tech-focused Nasdaq, meanwhile, is additionally referred to as 20 points lower, even though market heavyweights corresponding to Tesla (TSLA) and Nvidia (NVDA) are edging higher in premarket.

Related: Top analyst lays out bold bull case for Tesla stock price target

Tesla, which is up 2.fifty five%, is getting a lift from new last night that Trump has appointed Elon Musk, moreover to biotech investor Vivek Ramaswamy, to lead a government efficiency drive aimed a slashing spending from the $6.seventy 5 trillion Federal Budget.

“This might well send shockwaves through the system, and anyone pondering Government waste, which is an extraordinarily good buy of people,” said Musk.

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In distant places markets, the regional Stoxx 600 benchmark slipped 0.1% in early Frankfurt trading, while the Britain's FTSE 100 edged 0.1% higher in London.

Overnight in Asia, China stocks posted modest gains, but weakness in South Korea, Hong Kong and India pulled the MSCI ex-Japan index 0.seventy six% lower into the close of trading. Japan's Nikkei 225 ended 1.sixty six% lower, following on from last night's selloff on Wall Boulevard.

Related: Veteran fund manager sees world of pain coming for stocks