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Market snapshot: inventory futures pause whereas buyers watch for inflation knowledge

Stock index futures were mixed on Thursday as investors braced themselves for a glimpse of the much-anticipated May inflation read.

What are the most important benchmarks doing?

Futures on the Dow Jones Industrial Average
JM00,
+ 0.23%
rose 79 points, or 0.2%, to 34,516.

S&P 500 futures
ES00,
+ 0.05%
rose 2.65 points or less than 0.1% to 4,221.25 points.

Nasdaq 100 futures
NQ00,
-0.29%
fell 34.50 points, or 0.3%, to 13,779.75 points.

On Wednesday, stocks closed a little lower, with the Dow
DJIA,
-0.44%
fall by 152.68 points or 0.4% to 34,447.14 points. The S&P 500
SPX,
-0.18%
abandoned a modest early advance that pushed the large-cap benchmark slightly above its previous record close of 4,232.60 on the 7th. The Nasdaq network
COMP,
-0.09%
closed 0.1% lower.

What is driving the market?

Shares have been held on hold this week as investors waited for the CPI measurement due at 8:30 a.m. Eastern Time in May. Economists expect the CPI to rise 0.5% a month in May. That would put the rate at 4.8% year over year or slightly higher, the fastest since 2008 when oil peaked at $ 150 a barrel.

Read: Inflation is still rising, the CPI is likely to show. Is there any relief for consumers in sight?

"Unless inflation is well above expectations, the Fed's stance will not change much," said Fawad Razaqzada, a market analyst at ThinkMarkets. A rise in line with forecasts could cause stocks to continue drifting higher until next week's Fed policy meeting.

"But if we see a bigger value – like 5% or more – inflation worries could haunt investors again as it could fuel speculation that price pressures will not be temporary," Razaqzada wrote. "So it depends a lot on the outcome of the inflation report."

A hotter than expected CPI spike in April briefly shook markets last month, raising concerns about the potential for runaway inflation and the possibility that the Federal Reserve may act earlier than expected to curb its bond purchases.

But those inflation worries seem to have faded and government bond yields are falling. The yield on the 10-year government bond
TMUBMUSD10Y,
1.502%
fell below the 1.50% mark on Wednesday for the first time since the beginning of May.

"Investors seem to be pulling out of reflation trading at the moment of greatest risk that the realized data catches up with expectations," said Ian Lyngen, head of US interest rate strategy at BMO Capital Markets, in a press release.

The European Central Bank will make a statement at the end of its policy meeting at 1:45 p.m. Frankfurt time or 7.45 a.m. ET, followed by ECB President Christine Lagarde's press conference at 8:30 a.m.

The ECB is widely expected to maintain the accelerated pace of its bond purchases while increasing its outlook for the euro area economy. However, some analysts see scope for policymakers to slow down bond purchases under the PEPP pandemic emergency purchase program.

See: The decision of the ECB is coming. That is what analysts expect.

Meme stocks continued to be in focus afterwards GameStop Corp.
GME,
+ 0.85%
It was announced late Wednesday that the US Securities and Exchange Commission had asked for their cooperation on an investigation into the unprecedented volatility of its stock over the past few months. It also suggested that it isn't the only one under investigation.

Weekly unemployment claims data are also released at 8:30 a.m. Economists assume that initial claims for benefits fell to 370,000 in the week ending June 5, compared with 380,000 the previous week.

The federal budget figures for May are due at 2 p.m. East.

Which companies are in focus?

GameStop named two Amazon.com Inc.
AMZN,
+ 0.52%
Officials named new top executives shortly after private equity investor Ryan Cohen was elected chairman of the company's board of directors. The company also announced plans to sell more shares. The popular Meme stock lost more than 5% in pre-market trading.

Other meme stocks have come under pressure following GameStop's publication of the SEC investigation AMC Entertainment Holdings Inc.
AMC,
-10.37%
minus 3.1%; BlackBerry Ltd.
BB,
-4.05%
minus 1.7%; Koss Corp.
KOSS,
-7.09%
down by 1.2%; and Nokia Corp.
NO,
-1.61%
from 1.1%.

Shares in RH
RH,
-2.78%
rose more than 6% after former retailer Restoration Hardware beat earnings expectations again in early 2021 and raised its forecast for the year.

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