Stock futures are flat following S&P 500’s third winning week in a row

Stock futures were flat in overnight trading Sunday, following the S&P 500’s third straight weekly gain, as investors shifted focus to a key inflation report this week.

Futures on the Dow Jones Industrial Average dipped 40 points. S&P 500 futures and Nasdaq 100 futures both inched down 0.1%.

The overnight action followed a weekly gain for the S&P 500 and the Nasdaq Composite as a surprisingly strong monthly jobs report eased some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Federal Reserve.

A new reading for the consumer price index, slated for release Wednesday, will give investors more clarification about the central bank’s next move at its policy meeting in September. Traders are now pricing in a higher likelihood of a 0.75 percentage point hike next month, which would be the third straight increase of that magnitude.

“The strong gains in the job market last month should further cement the claim that the U.S. is currently not in recession,” said Jeffrey Roach, chief economist at LPL Financial. “The big headline gain in jobs was a surprise and could convince people…that the economy needs another 75 basis point hike at the Fed’s next meeting. All eyes are now on inflation.”

Headline CPI, which includes energy and food, is expected to dip to 8.7% in July, from a 40-year high of 9.1% in June, according to Dow Jones.