Dow, S&P 500, Nasdaq poised to fall as inflation worries mount

U.S. stock futures drifted lower on Wednesday ahead of new consumer inflation data as investors weighed whether a Donald Trump White House would increase price pressures.

Dow Jones Industrial Average futures (YM=F) fell about 0.2%, coming off a steep slide as stocks closed lower across the board. Contracts on the S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) were also down 0.2%.

Inflation has once again taken center stage after the post-election crackdown hit a wall. The FOMO market has lost its mojo as it ponders whether President-elect Trump’s policies could boost inflation as well as the economy. It helped push government interest rates higher and promised higher borrowing costs all around.

Now the wait is on for October’s consumer price index, which is considered unlikely to show much progress in cooling inflation to the Federal Reserve’s target. The headline CPI reading is expected to come in at 2.6%, higher than in September, when released at 8:30 ET.

Investors will focus on the “core” print – which excludes food and gas prices – to provide the main clues to the Fed’s pace of easing after it cut interest rates by 0.25% last week. Many economists suggest the prospect of a Trump inflation bump will prompt the central bank to do so reduce interest rate cuts this cycle.

Read more: What the Fed’s Rate Cut Means for Bank Accounts, CDs, Loans and Credit Cards

The Fed may have to reconsider another cut at its December meeting if inflation surprises “to the upside” over the next month, Minneapolis Fed President Neel Kashkari told Yahoo Finance. “It might give us pause,” he said at Yahoo Finance’s Invest conference on Tuesday.

Trump has named Tesla ( TSLA ) CEO Elon Musk to help lead a new Department of Government Efficiency — another challenge for analysts trying to gauge the electric carmaker’s prospects. The incoming president’s choices for his cabinet are also closely watched for impact on his politics and finances, even though the DOGE is not a government agency.

Tesla’s stock edged higher in premarket trading, marking a comeback from a 6% drop on Tuesday. Meanwhile, shares of Rivian ( RIVN ) rose after Volkswagen raised its investment in the rival electric car maker to $5.8 billion.