Investing.com -- U.S. futures pointed into the red on Monday, with markets gearing up for a week of major economic data that could help determine the path ahead for Federal Reserve interest rate policy. Meanwhile, big-box retailers like Home Depot (NYSE:HD) and Target (NYSE:TGT) are due to unveil their latest results in the coming days, as consumer sentiment darkens ahead of the key holiday shopping season.

1. Futures edge lower

U.S. stock futures inched broadly lower on Monday, as investors looked ahead to key inflation data later in the week and digested a decision by Moody's (NYSE:MCO) Investor Service to downgrade its U.S. credit rating outlook.

By 04:41 ET (09:41 GMT), the Dow futures contract were mostly unchanged, S&P 500 futures had shed 9 points or 0.2%, and Nasdaq 100 futures fell by 52 points or 0.3%.

The main indices on Wall Street closed higher on Friday, rising to their second straight week of gains, while U.S. Treasury yields were little changed. Technology stocks outperformed, helping drive the tech-focused Nasdaq Composite up to its largest one-day percentage gain since May. The benchmark S&P 500 also finished at its highest closing level in a little under two months.

Sentiment was somewhat dented heading into the new trading week after Moody's lowered its outlook for the U.S.'s credit rating to "negative" from "stable," citing a jump in servicing costs and ongoing political "polarization." In an announcement on Friday, the agency also warned that America's fiscal deficits could "remain very large" as long as lawmakers remain at an impasse over a plan to stem a decline in debt affordability following a recent spike in Treasury yields.

2. Inflation data ahead

The October reading of the U.S. consumer price index (CPI), a major inflation gauge, is set to headline the economic calendar this week as investors attempt to calibrate their expectations for Federal Reserve interest rate policy.

On a monthly basis, the measure -- due out on Tuesday -- is expected to have risen 0.1% on a monthly basis. September's CPI rose 0.4% on a surprise surge in rental costs, although there were signs of moderation in underlying inflationary pressures. Year-on-year, consumer prices are seen increasing 3.3%, slowing from 3.7% in the prior month.

The so-called core figure, which strips out volatile items like food and energy, is projected to rise by 0.3% monthly and 4.1% annually.

Fed policymakers will likely be keeping close tabs on the data, particularly with a final rate decision of 2023 looming in December. Speaking at an event last week, Fed Chair Jerome Powell flagged that officials "are not confident" that borrowing costs are high enough to bring inflation back down to the U.S. central bank's 2% target.