Traders work on the floor of the New York Stock Exchange.
Stock futures were flat in overnight trading on Tuesday after Wall Street appeared near all-time highs.
Futures contracts on the Dow Jones Industrial Average have changed little. The S&P 500 and Nasdaq 100 futures contracts also remained stable.
The S&P 500 and the Dow blue chip both closed near the flat line on Tuesday. The broad benchmark for equities is now only 0.3% below its all-time high of 4,238.04 reached on May 7. Investors await the next inflation reading to assess whether the higher price pressures are only temporary as the economy continues to rebound from the pandemic-induced recession.
“US stocks have largely been stuck in a range since mid-April and don’t look likely to break out anytime soon,” Edward Moya, senior market analyst at Oanda, said in a note. “Investors want to see how much price pressure intensifies and how deep the fall in stocks will be once the Fed’s tantrum tapping begins.”
The May Consumer Price Index is expected to be released on Thursday. Economists expect the CPI to rise 4.7% from the previous year, according to Dow Jones. In April, the CPI rose 4.2% on an annual basis, the fastest increase since 2008.
Meanwhile, the meme stock mania continued to escalate on Tuesday with day traders moving to Clover Health, which rose 96% in one session amid explosive trading volumes. Wendy’s, another popular name among Reddit traders, gained 25% on Tuesday.
Still, many on Wall Street believe this episode should remain limited to a handful of names, unlike GameStop’s trading frenzy in January which impacted the wider stock market.
“Given the low risk of widespread contagion, we consider the fallout from the recent short squeeze
limited, ”said Maneesh Deshpande, global head of equity derivatives strategy at Barclays, in a note. “The current short squeeze is more localized, possibly because the number of stocks with high short-term interest has declined significantly.
On the data front, job vacancies in April hit a new record, with 9.3 million job vacancies posted amid the economic recovery.