Stock market barely budges as it braces for inflation report

U.S. stock indexes held at a near standstill again on Tuesday, as traders made their final moves ahead of some potentially marketmoving reports.

The S&P 500 edged up by 7.52 points, or 0.1%, to 5,209.91 after barely budging the day before. The Dow Jones Industrial Average slipped 9.13 points, or less than 0.1%, to 38,883.67, while the Nasdaq composite rose 52.68, or 0.3%, to 16,306.64.

Treasury yields eased in the bond market ahead of Wednesday’s highly anticipated update on inflation at the U.S. consumer level. This week will also bring other reports on inflation, while big U.S. companies will begin delivering their reports for how much profit they made during the first three months of the year.

The dominant question hanging over Wall Street is whether inflation will cool enough to convince the Federal Reserve to deliver the cuts to interest rates that traders are craving and have been betting on.

Some doubts have crept in following a series of hotter-than-expected reports on the economy, and traders now expect just two or three cuts to rates this year. Some are even talking about the possibility of zero.

That’s down from forecasts at the start of the year for six or seven cuts, according to data from CME Group.

The Fed’s main interest rate has been sitting at its highest level in more than two decades, and the fear is that rates left too high for too long can cause a recession.

Strategists at Bank of America are looking for Wednesday’s inflation update to show a cooldown after ignoring food and energy prices, which can zigzag sharply. Such a result would likely increase traders’ expectations for a cut to rates in June, which the market currently sees as slightly better than a coin flip’s probability.