US Pre-Market Open – Mixed Trading as Markets Await Inflation Data

Stock markets mostly mixed pre-market open as investors await inflation data, and mull over continuing escalation in the Middle East.

The DOW and the S&P 500 both set new all-time high closes this week, while the NAS100 has lagged behind failing to print a new high. The market attention turns to the PPI data later on today.

Analysts are expecting a small drop in YoY PPI from 1.7% to 1.6%, while Core PPI YoY is expected to rise to 2.7% from 2.4%. Although this is not the Fed’s most relevant inflation data, which is instead the PCE index.

The market will be looking for confirmation of a slowdown in price pressure that will help the Fed stay on track with its loosening schedule. The Fed Fund futures market is pricing a probability of 82.4% for a cut in rates at the November 7 FOMC meeting, according to the CME FedWatch tool.

Some good news comes from the tech market with shares of Uber and Lyft rising pre-open after Elon Musk gave some details about Tesla’s new Robotaxi, supposedly priced under $30 thousand.

Lyft is up over 4% and Uber is up over 5.8% on the day.

Middle East Tension

After the Israeli attack on Hezbollah’s leadership with pager and cell phones the conflict has continued to expand. The country’s invasion of Lebanon has widened the conflict as Israel seems determined to resolve an ongoing conflict which has cost many lives.

The market’s main concern is that this conflict could widen even further and possibly involve Iran. A broader conflict that might involve the theocratic republic could also spark involvement from third parties and possibly oblige involvement from the U.S.

For now, the main reaction has been the sharp increase in crude oil, where USOIL prices have rallied over 11%.