Dow, S&P 500 and Nasdaq are set to fall as inflation concerns mount

U.S. stock futures fell on Wednesday ahead of new consumer inflation data as investors weighed whether a Donald Trump White House would increase price pressures.

Dow Jones Industrial Average futures (YM=F) fell roughly 0.2%, coming off a steep decline as stocks closed lower across the board. Contracts on the S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) also fell 0.2%.

Inflation is back in focus after the post-election crack hit a wall. The FOMO market has lost its mojo as it wonders whether newly-elected President Trump’s policies could boost both inflation and the economy. That helped lift government bond yields, promising higher borrowing costs everywhere.

Now we have to wait for the consumer price index for October, which is unlikely to show much progress in cooling inflation to the Federal Reserve’s target. At 8:30 a.m. ET, the CPI reading is expected to be 2.6%, higher than in September.

Investors will focus on the ‘core’ – which excludes food and gas prices – to provide key clues to the Fed’s pace of easing after it cut rates by 0.25% last week. Many economists suggest that the prospect of a rise in inflation under Trump will prompt the central bank to do so push back on interest rate cuts this cycle.

Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards

The Fed may have to reconsider another cut at its December meeting if inflation surprises “on the upside” next month, Minneapolis Fed Chairman Neel Kashkari told Yahoo Finance. “That could give us some food for thought,” he said at Yahoo Finance’s Invest conference on Tuesday.

Trump has named Tesla CEO Elon Musk and former Republican candidate Vivek Ramaswamy to lead a new Department of Government Efficiency. The new president’s cabinet choices are being closely watched for their impact on his policies and the economy, even though DOGE is not a government agency.