CPI Coming Up, Fed Minutes Released, Delta Air Lines Set to Report – What’s Influencing the Markets

Wall Street Futures Dip Ahead of Inflation Data and Earnings Reports

Futures on Wall Street have experienced a slight decline as investors exercise caution ahead of the latest U.S. inflation figures and numerous corporate earnings announcements. Economists anticipate that inflation pressures have eased closer to the Federal Reserve’s target of 2% in September. Additionally, minutes from the Fed’s last meeting reveal that a significant majority of members favored a 50-basis point interest rate cut, although some voiced concerns regarding the magnitude of this reduction.

1. Futures Decline

U.S. stock futures were mostly lower on Thursday as market participants awaited new economic indicators and earnings reports. As of 03:30 ET, Dow futures decreased by 26 points (0.1%), S&P 500 futures fell by 7 points (0.1%), and Nasdaq 100 futures dipped by 27 points (0.1%).

The main stock indices on Wall Street finished the previous session positively, partly driven by insights from the Federal Reserve’s September meeting. However, policymakers clarified that this decision does not imply a specific upcoming trajectory for further rate reductions.

In individual stock movements, shares of Alphabet faced a reduction following a U.S. Department of Justice court statement indicating it may seek to dismantle parts of Google’s search business.

2. Upcoming CPI Data

On Thursday, markets will have access to new inflation data that could influence the Fed’s future policy strategies. Economists forecast that the consumer price index (CPI) will have slowed to 2.3% on an annual basis for September, down from 2.5% in August. Month-on-month, the CPI is expected to decelerate to 0.1%, down from 0.2%.

Core CPI, excluding volatile food and energy prices, is projected to mirror August’s 3.2% annual rate while easing slightly to 0.2% on a monthly basis.

In addition, weekly initial unemployment claims are anticipated to rise to 231,000 from the previous 225,000, although the impact of Hurricane Helene in the Southeastern U.S. and ongoing strikes at Boeing might influence these figures.

Following a strong jobs report last week, optimism is growing that the Fed can manage a “soft landing” for the economy, effectively controlling inflation without triggering significant disruptions in the labor market or overall economic activity.

3. Fed’s Rate Cut Minutes

Minutes from the Federal Reserve’s September 17-18 meeting reveal that a "substantial majority" of officials backed a 50-basis point reduction in interest rates. However, some divisions remained, with one member dissenting in favor of a more conventional quarter-point cut.

The minutes indicated that several policymakers considered a smaller cut could have been warranted, citing signs of job market strength and lingering inflation concerns above the 2% target. Nonetheless, there was consensus that the half-point cut doesn’t dictate a specific path for future rate changes.

Traders currently anticipate an 85% chance that the Fed will implement another 25-basis point cut at its November meeting, while there is a 15% likelihood that rates will remain unchanged within the current 4.75% to 5.00% range.

4. Delta Air Lines Earnings Report

The earnings season for U.S. airlines kicks off this week, starting with Delta Air Lines. The Atlanta-based airline had reported record revenue of $15.4 billion in the previous quarter, slightly below market expectations, due to summer travel demand leading to overcapacity and reduced fares.

CEO Ed Bastian reassured investors that pricing power would significantly improve starting in August. Analysts expect that capacity growth will be a major focus for investors when Delta releases its earnings ahead of the market opening on Thursday.

Bank of America Securities analysts noted that, despite potential conservative guidance from Delta ahead of its investor day on November 20, the industry outlook remains positive due to stable demand for air travel and moderating capacity growth, which is expected to benefit airlines as fuel prices fall.

5. Oil Prices Rise Amid Hurricane Milton’s Impact

Oil prices increased on Thursday as Hurricane Milton struck Florida, raising concerns over possible supply disruptions, particularly in the Middle East. By 03:31 ET, the Brent contract rose by 0.7% to $77.09 per barrel, while U.S. crude futures climbed 0.7% to $73.77 a barrel. Both contracts had declined approximately 5% over the past two sessions.

Hurricane Milton’s landfall in Florida, while avoiding significant oil infrastructure in the Gulf of Mexico, has already boosted gasoline demand in the state, which in turn supports crude oil prices. Additionally, traders remain cautious regarding potential escalations in Middle Eastern conflicts, particularly involving Israel’s actions toward Iranian oil facilities.