Wall Street is set to open around equilibrium on Wednesday morning, following the release of inflation figures in line with expectations, supporting the scenario of a further rate cut by the end of the year.

Half an hour before the opening, futures on the main New York indices were little changed, pointing to a relatively stable start to the session.

The rise in US consumer prices accelerated in October, mainly due to a marked increase in rental prices, the Labor Department announced this morning.

The CPI index rose by 2.6% last month compared with the same month in 2023, an annual rate 0.2 points higher than in September, but in line with market forecasts.

The annual underlying core inflation rate - which excludes volatile items such as food and energy - came in at 3.3% last month, a level also in line with economists' forecasts.

Investors believe that the release of these figures is unlikely to call into question the prospect of a 25 basis point rate cut by the Federal Reserve in December.

The likelihood of further monetary easing next month has even been reinforced by these figures, and is now rated at 79% by traders, according to CME Group's FedWatch barometer.

The announcement that core inflation is under better control is also weighing on the yield on 10-year Treasuries, which had been subject to marked sell-offs since Donald Trump's election.

The yield on 10-year Treasuries is down around five basis points to 4.38%.

The greenback, which has been very much in the spotlight since Trump's victory, has also turned downwards, with the euro/dollar trading above 1.0630.

While the sign of better-controlled inflation could make the Federal Reserve more accommodating in its monetary policy this year, some investors are nonetheless warning of a potential resurgence of inflation with the return of Donald Trump to the White House.

The promises of tax cuts, the potential deregulation of many sectors and the increase in customs duties are indeed likely to push prices back up, warn analysts.

Investors will have to prepare for market rotation and increased volatility, particularly in sectors sensitive to trade fluctuations and environmental regulations", warns Thomas Jaquet, Head of France at Freedom24.

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