Stock futures fall as traders assess presidential debate and brace for August consumer inflation report: Live updates

 

U.S. stock futures slipped Tuesday night as investors assessed the presidential debate between Republican presidential nominee Donald Trump and Vice President Kamala Harris and looked toward the August consumer inflation report due Wednesday morning.

Dow Jones Industrial Average futures

 fell 172 points, or 0.42%. S&P 500 futures

 and Nasdaq 100 futures

 both dipped 0.52% and 0.68% respectively.

In after-hours action, shares of GameStop

 dropped 10%. The video game retailer amended an open market sale agreement filed with the U.S. Securities and Exchange Commission, allowing it to sell up to 20 million additional shares of its Class A common stock.

During Tuesday’s regular trading, the S&P 500

 advanced nearly 0.5% and the Nasdaq Composite

 climbed 0.8%, aided by a jump in Nvidia

 shares. It marked a back-to-back gain for the broad market benchmark and the tech-heavy index. The 30-stock Dow

 was the outlier, falling 0.2% as a decline in JPMorgan shares weighed on the blue-chip index.

Traders are anticipating a key economic report Wednesday morning: August’s consumer price index. Economists polled by Dow Jones expect the headline CPI to have risen 0.2% from the previous month and 2.6% from a year earlier.

The CPI report and Thursday’s producer price index could help determine the size of a widely expected rate cut at the end of the Federal Reserve’s two-day meeting on Sept. 18. Fed funds futures trading suggests a 69% chance of a 25-basis-point rate cut and a 31% likelihood of a 50-basis-point reduction, according to CME’s FedWatch Tool.

“I think what we’re going to see next week is a Fed that gives us a 25-basis-point rate cut because to give us a 50-basis-point cut will set off alarm bells and would also be an admission of guilt,” said Kristina Hooper, chief global market strategist at Invesco, on CNBC’s “Closing Bell.”

“I don’t think that the Fed keeping us at very restrictive monetary policy levels for a long time creates damage that is irreparable, but I do believe every day that we have rates at these levels the odds of a recession increase,” Hooper added.

She noted that central bankers may have to indicate next week through their dot plot — a chart of Fed policymakers’ projections for rates — that future reductions are on deck sooner rather than later.

Markets could see a ‘punch in the stomach’ moving forward, says Chris Verrone

On top of an already weak September that has historically pushed stocks lower, Wall Street could see another jolt ahead, according to Strategas Research Partners partner and head of technical analysis Chris Verrone.

“I don’t think we get through the next four five six weeks without some punch in the stomach,” Verrone told CNBC’s “Closing Bell” on Tuesday. “Will that be viable? I do think ultimately it will be. The trends underneath it are probably strong enough, but there are questions that we have about what is the countercyclical message of markets and macro telling us about 2025.”

Next year’s earnings growth forecasts rely on tech and health care most of all, Strategas says

Next year’s ambitious earnings growth forecasts rely on stronger results from technology and health-care stocks far more than any other sector, Strategas Securities analysts Ryan Grabinski and Jonathan Byrne wrote to clients Tuesday.

Tech and health care are forecast to contribute half of the 15% expected growth in S&P 500 profits in 2025. “With those two sectors being particularly important for next year’s growth, any downward revisions there will slow the growth rate significantly,” Strategas said. Financials and communications services stocks are also expected to show large contributions to next year’s profits, while consumer staples and consumer discretionary stocks are only forecast to boost 2025 profits by 10% combined.

Assumptions also rely on sky-high profit margins for corporate America as a whole.

The 15% earnings growth analysts see in 2025 would lift S&P 500 earnings to $280, and implies profit margins “next year would have to reach an all time high of 13.9%. This would be more than 1 percentage point higher than any point in the last 35 years. The highest operating EPS margin achieved was 12.4% in 2021 which was also a time when costs were way down due to closures and spending was up due to government transfers. For next year, it’s very difficult to see how nearly 14% margins can be achieved,” Strategas added.

Stocks making biggest moves after the bell: Petco, Dave & Buster’s and more

These are the stocks moving the most in after-hours trading:

• Petco Health & Wellness — Shares rose 4% after the pet retailer posted second-quarter earnings that came in line with expectations, while Petco’s revenue of $1.52 billion was slightly below the $1.53 billion analysts surveyed by LSEG had anticipated.
• Dave & Buster’s Entertainment — The arcade chain’s stock climbed 8% after Dave & Buster’s posted earnings per share of 99 cents, while analysts polled by LSEG had expected just 84 cents.
• Morgan Stanley — The bank stock fell 1% following a downgrade to neutral from buy at Goldman Sachs.

Read the full list of stocks moving here.

Stock futures open little changed

Stock futures opened near the flatline Tuesday night.

Futures linked to the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 were all trading marginally lower in extended trading hours.