Stock futures fall 0.6% as traders brace for May CPI data

Nasdaq 100 futures fell 0.6% to 19,842 and S&P 500 futures dropped 0.4% to 5,367 as traders positioned for the May consumer price index report due at 8:30 a.m. ET.

"The CPI print is the single most important data point before next week's FOMC meeting, and the market is pricing in a 72% probability that rates will be higher by year-end," said Thomas Simons, chief U.S. economist at Jefferies.

Economists project headline CPI accelerated to 4.2% year over year in May, the fastest pace in more than three years. The Cleveland Fed's nowcast points to an even higher reading of 4.18%. Core CPI, which strips out food and energy, is expected to hold at 2.8%. The 10-year U.S. Treasury yield rose two basis points to 4.54% in early trading, while the dollar index edged higher.

A hotter-than-expected print would reinforce expectations that the Fed may need to raise rates as soon as December, a scenario that has already triggered a rotation out of high-flying AI and semiconductor stocks this week. Oracle's fiscal fourth-quarter earnings after the closing bell will provide the next test of whether cloud infrastructure spending can justify the heavy capital outlays required to compete with hyperscalers.

Dow futures slipped 0.2% and Russell 2000 futures declined 0.5%, reflecting broad-based caution. The moves follow a tech-led selloff Tuesday that dragged the Nasdaq to a two-week low, with Nvidia falling more than 6% and Tesla dropping a similar magnitude.

Geopolitical uncertainty added to the pressure after overnight U.S. military strikes against Iranian air defenses. The escalation sent WTI crude oil briefly above $92 a barrel before paring gains to trade near $90.

In premarket trading, Super Micro Computer fell 10% after announcing a $7 billion financing package to fund its AI infrastructure backlog. Taiwan Semiconductor slipped 2% even after reporting a 30% surge in May sales, as concerns over potential AI chip regulation weighed on the sector. Oracle shares were little changed ahead of its earnings report after the close.

The Cboe Volatility Index rose to 24.5, above its trailing one-year average of 18.2, reflecting elevated uncertainty ahead of the data release. Fed policymakers are in a media blackout period ahead of new Chair Kevin Warsh's first Federal Open Market Committee meeting beginning June 16.

This article is for informational purposes only and does not constitute investment advice.