Wall Street Futures Drift Lower Amid Rising Treasury Yields and Inflation Concerns

U.S. stock index futures slipped as Treasury yields increased, impacting rate-sensitive stocks ahead of key inflation data. This data is crucial for the Federal Reserve's upcoming interest rate decisions. Despite Tuesday's decline, Wall Street remains optimistic due to potential pro-business policies from President-elect Donald Trump.

U.S. stock index futures experienced a downturn on Wednesday, with rising Treasury yields exerting downward pressure on equities sensitive to interest rates. Investors are keenly awaiting crucial inflation data, which will provide insights into the Federal Reserve's upcoming decisions on interest rate reductions.

Wall Street faced a decline on Tuesday as an initial post-U.S. election rally lost momentum. The benchmark U.S. 10-year Treasury yield's breach of the 4.4% mark has fueled expectations of inflation risks linked to President-elect Donald Trump's policies. According to Deutsche Bank analysts, the upcoming U.S. Consumer Price Index (CPI) figures will significantly influence the Federal Reserve's meeting in December, amid speculation of a potential pause in rate cuts.

The market anticipates a 58.7% probability of a 25-basis point interest rate cut in December, with October's CPI figures under scrutiny for signs of moderated inflation. Economists predict a monthly rise of 0.3% in core inflation and 0.2% in the headline number. Notably, EV maker Tesla stock rebounded by 1.8%, while Spirit Airlines faced a sharp drop, and Rivian benefited from increased investment by Volkswagen.

(With inputs from agencies.)