U.S. stock index futures are signaling a modestly positive start to trading on Tuesday, suggesting equities may build on the rebound seen late in the previous session, which ended with mild gains after an early dip.
Futures ticked higher after the release of the U.S. Labor Department’s closely followed December inflation report. The data showed headline consumer prices rose broadly in line with expectations, while underlying inflation came in slightly softer than forecast.
According to the report, the consumer price index increased by 0.3% in December, matching economists’ estimates. Excluding food and energy, core consumer prices rose 0.2% over the month, below the 0.3% increase that analysts had anticipated.
On an annual basis, headline inflation held steady at 2.7% in December, unchanged from November and in line with consensus forecasts. Core inflation also remained unchanged at 2.6% year over year, defying expectations for a modest uptick to 2.7%.
The data may reinforce recent optimism around the interest-rate outlook ahead of the Federal Reserve’s next policy meeting later this month.
U.S. equities started Monday’s session under pressure but staged a strong recovery as trading progressed. Major indices climbed sharply off their intraday lows and moved into positive territory, with both the Dow Jones Industrial Average and the S&P 500 finishing at fresh record closing levels.
Although stocks eased back slightly from their highs into the close, gains were preserved. The Dow added 86.13 points, or 0.2%, to finish at 49,590.29. The Nasdaq advanced 62.56 points, or 0.3%, to 23,733.90, while the S&P 500 rose 10.99 points, or 0.2%, to 6,977.27.
Early weakness on Wall Street was partly driven by concerns over the Federal Reserve’s independence after Chair Jerome Powell disclosed that the central bank had received subpoenas from the Department of Justice carrying the threat of criminal charges.
“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June,” Powell said in a video statement released by the Fed on Sunday. “That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.”
U.S. media outlets reported that federal prosecutors have opened a criminal investigation into Powell linked to his June testimony to Congress regarding a $2.5 billion renovation program covering three buildings, including the Eccles Building, the Fed’s headquarters.
Powell described the move as “unprecedented” and attributed it to ongoing pressure from President Donald Trump, who has repeatedly called on the Fed to cut interest rates.
The Fed chair said he holds deep respect for the rule of law and democratic accountability, while noting that the central bank’s leadership is not above legal scrutiny.
“Trump wants to lower borrowing costs, so consumers and businesses spend more money and propel the economy,” said Russ Mould, investment director at AJ Bell.
He added, “However, what’s worrying markets now over Trump’s implied intervention is that the loss of Fed independence could lead to inflation getting out of control.”
As the session wore on, selling pressure eased as investors refocused on the interest-rate outlook. While the Fed is widely expected to leave rates unchanged at its upcoming meeting, markets continue to anticipate at least one additional quarter-point rate cut later this year.
Sector-wise, computer hardware stocks were among the strongest performers, with the NYSE Arca Computer Hardware Index jumping 5.0%. Gold stocks also rallied sharply, supported by a surge in bullion prices, pushing the NYSE Arca Gold Bugs Index up 3.5%.
Steel and networking stocks also posted solid gains, while airline and oil services shares lagged behind the broader market.