Dow futures plunge ahead of CPI data: 5 things to know before Wall Street opens

• All major index futures declined in pre-market trading: S&P 500 futures down 0.41% to 6,822, Nasdaq-100 futures down 0.55% to 24,630, and Dow futures down over 200 points to 49,304
• Investors are split on the CPI's market impact, with 33% expecting a 'risk-on' reaction, 43% 'mixed/negligible,' and 24% 'risk-off,' according to a 22V Research survey
• A hotter-than-expected CPI print could push bond yields higher and pressure growth stock valuations, particularly in rate-sensitive sectors like tech and real estate

Market Summary: Dow Futures Fall Ahead of Critical CPI Data

Market Overview:

U.S. stock futures declined sharply Friday morning ahead of the Consumer Price Index (CPI) release. Dow futures dropped over 200 points to 49,304, S&P 500 futures fell 0.41% to 6,822, and Nasdaq-100 futures slid 0.55% to 24,630. This follows Thursday's brutal selloff where the Dow plunged 669 points (1.3%) and the S&P 500 dropped 1.6%, led by technology stocks.

Key Economic Data:

Economists expect February CPI to show monthly inflation rising 0.3%, with year-over-year inflation easing to approximately 2.5%. Core CPI (excluding food and energy) is also projected at 0.3% monthly and 2.5% annually. This data is critical as it will influence Federal Reserve rate cut expectations and timing.

Market Implications:

A hotter-than-expected CPI reading typically pushes bond yields higher and reduces urgency for rate cuts, particularly pressuring growth stocks whose valuations depend on future earnings. The pre-data weakness reflects heightened market fragility rather than outright panic, with analysts describing it as "risk management."

Investor Sentiment:

Market participants remain deeply divided on the CPI's impact. A 22V Research survey shows 33% expect a "risk-on" reaction, 43% anticipate "mixed/negligible" response, and 24% forecast "risk-off" conditions. This disagreement is driving increased volatility, especially in rate-sensitive sectors like technology and real estate.

Additional Context:

The selloff occurs amid ongoing debate about AI spending sustainability, with concerns about whether massive AI investments are generating long-term growth or simply burning cash. Traders will monitor three key factors at market open: the CPI headline, Treasury yield movements, and whether selling pressure broadens beyond Thursday's tech-led decline.