Tuesday saw US stocks remain in a holding pattern as investors waited for the release of a significant inflation report that could provide insight into the future direction of interest rates.

Implementing Three Rate Cuts

Futures linked to the tech-heavy Nasdaq 100 (^NDX), the S&P 500 (\GSPC), and the Dow Jones Industrial Average (\DJI) were all trading slightly below the flatline.

Ahead of Wednesday’s Consumer Price Index release, which is anticipated to be a turning point for the market following a robust first quarter, stocks have become stuck.

Given the ongoing signs of strength in the US economy, investors are growing less and less confident that the Federal Reserve will implement the three rate cuts it has projected for this year.

This has made the March CPI reading even more important, as any indication that inflation has started to decline once more is interpreted as a call for a June policy change.

The 10-year Treasury yield (^TNX) has risen to over five-month highs due to diminishing expectations of a rate cut, which is another possible obstacle for equities.

Decrease In Benchmark Yield

The 5% level is considered to be the main area of concern. On Tuesday, the benchmark yield decreased to roughly 4.4%.

In the meantime, worries about a feed-through effect on inflation have been raised by rising metals prices. Key industrial input copper (HG=F) gained roughly 0.4% early on Tuesday, extending a 10% year-to-date advance that has sparked rumors of a new bull market.

Gold (GC=F) continued to rise, setting yet another new record, rising as high as 1.1% to $2,365.35 an ounce.

The beginning of the first-quarter earnings season, which begins in earnest on Friday with results from companies like Citigroup (C), JPMorgan (JPM), and Wells Fargo (WFC), is another catalyst in the near future.