3-13-18 7:52 AM EDT | Email Article

By Barbara Kollmeyer, MarketWatch

Qualcomm set to open lower after Broadcom deal nixed by Trump

U.S. stock futures pushed modestly higher on Tuesday, as investors made cautious moves ahead of an important update on consumer prices later.

Investors have become hypersensitive to inflation data and what any rise means for the Federal Reserve's interest-rate trajectory this year.

What are the main benchmarks doing?

Dow futures rose 46 points, or 0.2%, to 25,282, while S&P 500 futures inched up 5.40 points, or 0.2%, to 2,794.50. Nasdaq-100 futures rose 7.75 points, or 0.1%, to 7,173.25

Industrials drove losses for two major indexes on Monday (http://www.marketwatch.com/story/dow-gathers-strength-to-climb-further-above-25000-on-goldilocks-jobs-data-2018-03-12), with the Dow Jones Industrial Average falling 0.6% to 25,178.61, and the S&P 500 index slipping 0.1% to 2,783.02. Bucking the weaker trend, the Nasdaq Composite Index closed up 0.4%, to 7,588.32, marking its second record close in succession.

Opinion:Here's the No. 1 tech stock, according to money flows ()

What could drive markets?

All eyes will be on consumer prices due at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting a 0.2% gain for February, with milder inflation likely driven by lower gasoline prices. Core prices, which strip out gas and food, are expected to rise by the same amount.

On an annual basis, headline consumer prices held steady at 2.1% in January, and core prices were unchanged at 1.8%

A stronger-than-expected inflation number could nudge the central bank closer to four hikes instead of the three that the Federal Reserve is expected to carry out, something that could weigh on stocks. The Fed is expected to increase interest rates in March, but the jury out on how aggressively it will act beyond that.

Equities rallied late last week after wage growth came in lower-than-expected, but tipping into correction territory in early February after wages spiked.

Read:What to watch in the CPI report (http://www.marketwatch.com/story/what-to-watch-in-the-cpi-report-2018-03-12)

(http://www.marketwatch.com/story/what-to-watch-in-the-cpi-report-2018-03-12)And: The overheating economy could crash in 2019, this top forecaster says (http://www.marketwatch.com/story/the-overheating-economy-could-crash-in-2019-this-top-forecaster-says-2018-03-10)

What are strategists saying?

"The inflation news is not likely to show any strong surprises to the upside. Nevertheless, we continue to see a choppy trading session as the 'Fear Factor' over trade wars cap stocks and the ides of March are upon us," said Peter Cardillo, chief market economist at First Standard Financial, in a note to clients.

"While investors appear to be coming to terms with the idea of more rate hikes, some caution remains, especially as this has also come at a time when Donald Trump is threatening a trade war with countries that don't improve the terms of trade for the U.S.," said Craig Erlam, senior market analyst at OANDA, in a note to clients.

Which stocks are active?

Shares of Qualcomm Inc.(QCOM) fell 5% in thin, premarket trade after U.S. President Donald Trump on Monday blocked Broadcom Ltd's (AVGO) $117 billion hostile bid for the semiconductor group, citing national security concerns (http://www.marketwatch.com/story/trump-blocks-broadcom-bid-to-buy-qualcomm-citing-national-security-2018-03-12).

Read:How Broadcom vs. Qualcomm went from hostile takeover bid to a Trump blockage (http://www.marketwatch.com/story/how-broadcom-vs-qualcomm-went-from-hostile-takeover-bid-to-a-trump-blockade-2018-03-12)

Plus:Semiconductor stocks are hitting new highs again, yet they're still cheap (http://www.marketwatch.com/story/semiconductor-stocks-are-hitting-new-highs-again-yet-theyre-still-cheap-2018-03-08)

(http://www.marketwatch.com/story/semiconductor-stocks-are-hitting-new-highs-again-yet-theyre-still-cheap-2018-03-08)DSW Inc.(DSW) shares fell around 5% in premarket after the footwear retailer posted quarterly results.

Stitch Fix Inc.(SFIX) could be active after the online clothing retailer beat Wall Street's forecasts for sales, but missed on revenue. In addition, nearly 38 million new shares of the company became eligible for trading after Monday's close. (http://www.marketwatch.com/story/a-lot-more-stitch-fix-stock-could-be-coming-after-earnings-2018-03-12)

Shares of Dick's Sporting Goods Inc. (DKS) sank 6.3% in premarket trade Tuesday, after the sporting goods retailer beat fiscal fourth-quarter profit expectations, but missed on sales and provided a downbeat outlook (http://www.marketwatch.com/story/dicks-sporting-goods-stock-sinks-after-sales-miss-downbeat-outlook-offsets-profit-beat-2018-03-13).

What are other markets doing?

European stocks were edging lower (http://www.marketwatch.com/story/european-stocks-edge-higher-in-countdown-to-us-inflation-data-2018-03-13), while Asian markets had a mixed day (http://www.marketwatch.com/story/asian-markets-pause-ahead-of-us-inflation-report-2018-03-12) (http://www.marketwatch.com/story/nikkei-gets-off-to-quick-start-as-asian-markets-build-on-last-weeks-rebound-2018-03-11).

The ICE U.S. Dollar Index was up 0.1%, while gold prices (http://www.marketwatch.com/story/gold-slips-as-dollar-firms-ahead-of-cpi-report-that-could-shift-fed-rate-hike-pace-2018-03-13) slipped, and oil prices were trading slightly weaker.

The yield on the 10-year U.S. Treasury were less than a full basis point higher at 2.877%.


(END) Dow Jones Newswires

March 13, 2018 07:52 ET (11:52 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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