Inflation, earnings reports, Monday's markets, possible rail strike and more: Tuesday's 5 things to know

Here are the key events taking place on Tuesday that could impact trading.

INFLATION INDICATOR: A key indicator of inflation at the wholesale level is coming up Tuesday morning.

At 8:30 a.m. ET, the Bureau of Labor Statistics is expected to say that PPI rose 0.4% month-over-month according to Refinitiv forecasts, unchanged from a hotter-than-expected print of 0.4% in September. 

Year-over-year, prices paid by wholesalers are anticipated to jump 8.3%, less than September’s 8.5% pop and the fourth straight month of slowing growth. 

It would also be the lowest reading since July 2021, and along with last week’s cooler-than-expected October CPI report, could strengthen hopes for smaller Fed rate hikes. 

INFLATION HOLDS GRIP ON US ECONOMY IN OCTOBER AS PRICES REMAIN STUBBORNLY HIGH

Excluding food and energy costs, core producer prices are anticipated to rise 0.3% monthly in October, matching September’s 0.3% gain. 

Year-over-year look for growth in core PPI to hold steady at 7.2% in October, the seventh straight month of flat to slowing growth after a record 9.7% surge in March (data go back to April 2011).

At the same time the New York Federal Reserve will release its closely watched gauge of regional manufacturing activity. 

The Empire State Manufacturing Survey is expected to rise to -5.0 in November, remaining in contraction territory for a fourth month after plunging unexpectedly to -31.3 in August (a number below zero means that more New York-area manufacturers say business conditions are worsening than improving).

STOCKS LOWER: U.S. stocks finished lower Monday after last week's big rally, while investors digested fresh comments from Federal Reserve officials about the outlook for further interest-rate increases. 

The S&P 500 fell 35.68 points, or 0.9%, to 3957.25, and the NASDAQ Composite sank 127.11 points, or 1.1%, to 11196.22. The Dow Jones Industrial Average shed 211.16 points, or 0.6%, to 33536.70.

Stocks rose in recent days on hopes that the Fed might not have to tighten financial conditions much more after U.S. inflation in October came in below economists' estimates. The Fed's quest to tame inflation this year has dragged down stocks, bonds and commodities. 

MORTGAGE RATES CLIMB BACK ABOVE 7%

Some of last week's excitement cooled down to start the week. Of the 11 sectors within the S&P 500, only healthcare stocks gained. The real estate, consumer discretionary and utilities groups posted the biggest declines. 

"Just because there might be peak inflation, just because the Fed slows down, that doesn't actually mean that starts a new bull market because the recession risk still runs relatively high for next year," said Keith Lerner, co-chief investment officer at Truist Advisory Services Inc. 

Lerner noted stocks don't always rally when the Fed is cutting rates, pointing to the S&P 500's performance in 2000. 

Fed Vice Chair Lael Brainard said on Monday recent inflation data offered some signs of reassurance that price pressures were no longer broadening and that the central bank could soon slow the pace of interest-rate rises. 

But Fed governor Christopher Waller said over the weekend that policymakers still had "a ways to go" and would like to see more similar data points before easing a foot off the brake. 

Traders and investors said that one data point isn't enough to make the case for the Fed to pivot from its aggressive hiking stance. Many are already looking to the economy to see how it handled previous rate increases. 

"We've seen inflation taper off, but I wouldn't call it a trend," said Jason Ray, founder and investment director at Zenith Wealth Partners. "We're still thinking that the Fed will be hawkish and take measures to slow the economy."

3Q EARNINGS: Retailing giants and Dow members Walmart and Home Depot are out with quarterly results Tuesday morning, kicking off a busy week for retail-sector earnings. 

Watch for numbers from auto parts retailer Advance Auto Parts after the closing bell. 

Ticker	Security	Last	Change	Change %
WMT	WALMART INC.	91.30	+1.84	+2.06%
HD	THE HOME DEPOT INC.	429.55	+0.95	+0.22%
ARMK	ARAMARK	42.22	+0.39	+0.93%
ENR	ENERGIZER HOLDINGS INC.	38.43	-0.34	-0.88%
DNUT	KRISPY KREME	10.92	-0.21	-1.89%
TME	TENCENT MUSIC ENTERTAINMENT GROUP	11.07	-0.12	-1.07%
AAP	ADVANCE AUTO PARTS INC.	43.88	+0.45	+1.04%

More than 90% of the S&P 500 (465 companies) have reported 3Q numbers, and so far, the results are ahead of expectations.

RAIL STRIKE ON HORIZON?: The International Brotherhood of Boilermakers (IBB) announced Monday its members voted against ratifying a tentative agreement with the major freight railroads, making IBB the third labor group to turn down the deal brokered by the Biden administration and upping the chances of a nationwide strike.

The IBB said in a statement that it has now entered a "cooling off" period and plans to continue to negotiate further with the National Carriers' Conference Committee (NCCC), which represents the nation's largest railroads, including BNSF, CSX, Norfolk Southern and Union Pacific.

IBB joins the Brotherhood of Railroad Signalmen (BRS) and the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED) in rejecting the proposed contracts providing rail workers a 24% wage increase during the five-year period from 2020 through 2024.

RAILROAD COMPANIES ‘DISAPPOINTED’ SOME UNIONS REJECTED INITIAL DEAL: IAN JEFFRIES

Union rail workers opposed to the tentative agreement negotiated by President Biden's Presidential Emergency Board (PEB) are unhappy that the deal did not do more to address quality of life issues, particularly a lack of sick time and working on skeleton crews.

Ticker	Security	Last	Change	Change %
UNP	UNION PACIFIC CORP.	245.69	-3.61	-1.45%
CSX	CSX CORP.	36.69	+0.07	+0.19%
NSC	NORFOLK SOUTHERN CORP.	276.28	+0.31	+0.11%

Multiple union members told FOX Business they are frustrated that their union representatives signed off on the PEB's recommendations back in September, arguing the agreement did not do enough to improve working conditions.

All 12 unions involved in the negotiations must agree to ratify their new contracts, or a strike could take place, devastating supply chains and the economy at large, costing an estimated $2 billion a day. Congress is expected to get involved if a work stoppage is triggered, but multiple unions have agreed to continue negotiating into early December.

STUDENT LOAN HANDOUT ON HOLD: A federal appeals court on Monday agreed to a preliminary injunction to halt President Biden's plan to forgive student debt for millions of borrowers. 

The ruling by a three-judge panel in St. Louis' 8th U.S. Circuit Court of Appeals came days after a federal judge in Texas blocked the program.

"The injunction will remain in effect until further order of this court or the Supreme Court of the United States," Monday's ruling said. 

STUDENT LOAN REFINANCE INTEREST RATES EDGE UP FOR 5- AND 10-YEAR-LOANS

The judge in the Texas case said the plan usurped Congress' power to make laws. The Texas case was appealed, and the administration is likely to appeal the 8th Circuit ruling as well.

In that ruling, U.S. District Judge Mark Pittman — a Trump appointee based in Fort Worth — was critical of the way the program moved ahead without congressional approval.

"In this country, we are not ruled by an all-powerful executive with a pen and a phone. Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government," he wrote.

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The Biden administration has stopped accepting applications for the planned relief. The plan would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.