In today’s big story, we’re previewing the incoming inflation report that could decide the fate of the Fed’s rate-cut plans.

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March’s Consumer Price Index data drops this morning, and an unexpected acceleration in inflation could mean another reset of expectations for the market, writes Business Insider’s Matthew Fox.

Before the report’s release, the odds-on favorite for the first rate cut is the Fed’s June policy meeting, according to the CME FedWatch Tool. But if the report is hotter than expected — consensus is for core CPI to jump 3.7% year-over-year and 0.3% month-over-month — that timeline will likely get pushed back.

Yet, even that June timeline has seen dwindling odds this year. Markets think the chances of a June cut are down to about a coin toss, a drop from 70% earlier this year.

It’s been that kind of year for the markets. Aggressive expectations for how quickly rates would come down — six cuts in a year and a Goldilocks economy — have unraveled due to strong economic data that’s given the Fed pause.

Further complicating matters is labor-market data offering conflicting perspectives, with unemployment low, but hiring surveys showing weakness. That puts pressure on today’s report, described by one market watcher as “paramount.”

The idea has been gaining momentum for weeks and was recently suggested as a possibility by Minneapolis Fed President Neel Kashkari.

Some believe a cut-free 2024 isn’t such a bad thing. After all, stocks haven’t been hurting, with the S&P 500 up more than 9.5% this year. One market expert even suggested rate cuts will be bad for stocks, as it signals the economy could be in trouble.

The upcoming earnings season will also have a more direct impact on the market in the short term. Earlier this year, stocks rallied thanks to strong earnings reports despite evaporating hopes for a March rate cut.

But the hype around the biggest thing driving the market — artificial intelligence — could be cooling. And while investors have been OK kicking the can on rate cuts, some industries are desperate for relief.

In the beleaguered world of commercial real estate, for example, lenders and borrowers have cut deals to buy themselves time as they wait for cuts to materialize. Yet another delay could spell disaster.

🔔 Before the opening bell: US stock futures edge up in Wednesday’s premarket as traders await a crucial inflation report.

2. Why you shouldn’t bet on the gold rally. A market vet said the metal’s recent run isn’t supported by fundamentals. Instead, it’s more of a “catch up” effect after it underperformed last year.

3. Nvidia’s stock falls as the competition heats up. Shares in the AI darling fell 5% on Tuesday after Intel announced its new Gaudi 3 chip, which it said will be priced “a lot lower” than Nvidia’s H100 A1 offering.

2. A lawsuit reveals that Meta considered paying users for their data. In a testimony, an economist said users should each get $5 per month for their highly-valued data.

3. Your Google Docs are (probably) out of AI’s clutches. The tech giant has been training its AI tools using “publicly available” Google Docs, The New York Times reported last week. But that probably doesn’t refer to your files that are available to “anyone with the link,” BI’s Katie Notopoulos writes.

2. Miki Agrawal’s path forward. The former CEO of period underwear company Thinx is ready for a fresh start. For the first interview she’s done in years, she told BI about her experience as a female founder, her divorce, her new business ventures, and her time in a cave.

3. Spotify employees aren’t happy about its spending on lavish events. The streaming service celebrated its annual Wrapped campaign with a packed party at a London superclub — and then cut 1,500 jobs four days later. BI spoke to 14 current and former employees, who shared details about what they described as poorly-timed and extravagant parties.

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Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London.

Get in touch. Email us at insidertoday@insider.com

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