Dow, S&P 500 and Nasdaq set for decline as inflation worries mount

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

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

Inflation came back into focus after the post-election rise reached its limits. The FOMO market has lost its momentum as it ponders whether President-elect Trump’s policies could boost both inflation and the economy. This helped push up Treasury yields, promising higher borrowing costs overall.

Now one has to wait for October’s consumer price index as it is unlikely to show much progress in cooling inflation to the Federal Reserve’s target. When it is released at 8:30 a.m. ET, the consumer price index (CPI) is expected to rise 2.6%, higher than September.

Investors will focus on “core” pressures – which exclude food and gas prices – to provide the key clues to the Fed’s pace of easing after it cut interest rates by 0.25% last week. Many economists expect the prospect of a Trump inflation spike will prompt the central bank to moderate 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 rate cut at its December meeting if inflation surprises “on the upside” next month, Minneapolis Fed President Neel Kashkari told Yahoo Finance. “This might make us think,” he said at Yahoo Finance’s Invest conference on Tuesday.

Trump has named Tesla (TSLA) CEO Elon Musk to co-head a new Department of Government Efficiency, another challenge for analysts trying to assess the electric vehicle maker’s prospects. The new president’s choice of his cabinet will also be closely watched for its impact on his policies and the economy, even though DOGE is not a government agency.

Tesla shares rose in premarket trading, hoping for a comeback after a 6% decline on Tuesday. Meanwhile, shares of Rivian (RIVN) rose after Volkswagen increased its investment in the rival electric car maker to $5.8 billion.