Inflation Expectations and Market Sentiment
Economists are forecasting a 3.3% rise in October’s CPI, a slight decrease from September. A higher-than-expected CPI could challenge the notion that the Fed is finished raising rates, while a lower figure might reinforce it. Currently, there’s an 86% chance that rates will hold steady in December, as projected by the CME Group’s FedWatch tool.
Credit Rating and Government Shutdown Concerns
Adding to market uncertainty, Moody’s downgraded the U.S. credit outlook to “negative,” citing fiscal deficits. This comes alongside concerns of a potential U.S. government shutdown, with contentious stopgap measures being discussed in Congress.
Corporate Earnings and Economic Indicators
On the corporate front, Home Depot will report earnings before Tuesday’s bell, with analysts anticipating a year-over-year decline. Additionally, economic data releases and Fed officials’ remarks throughout the day will be closely monitored for further market direction.