Updated 2 min read
US stock futures were little changed in premarket trading on Wednesday as investors braced for fresh Consumer Price Index (CPI) data, which could alter the Fed’s interest rate calculus.
Futures on the Dow Jones Industrial Average (YM=F) traded flat, while those on the S&P 500 (ES=F) edged up 0.2%. Contracts for the Nasdaq-100 (NQ=F) rose 0.6% in what is a relatively quiet week in markets beyond the tail end of earnings season.
Wednesday’s inflation print will be closely watched following the softer-than-expected July jobs report. Economists expect the Consumer Price Index to rise at a slower annual rate of 3.4% in July compared to June’s 3.5% increase and climb 0.1% month over month.
A hotter-than-expected print could strengthen the case for the Fed to raise rates in September, while signs of inflation easing further could give the Fed room to hold rates steady. As of Tuesday, traders were pricing in a roughly 50-50 chance of a rate hike in September.
Inflation concerns have driven up global bond yields. In the US, the 30-year Treasury yield (^TYX) remained at 5.24%, while South Korea’s 30-year government bond yield climbed to a record.
Ongoing tensions in the Middle East serve as the backdrop propping up inflation and yields as the US and Iran remain deadlocked in negotiations to reopen the Strait of Hormuz. The US enforced its blockade of the strait by firing on a Panama-flagged ship attempting to cross the Gulf of Oman on Tuesday, lifting Brent crude futures (BZ=F) close to $90 per barrel.
On the earnings calendar, Cisco Systems (CSCO), Coherent Corp. (COHR), Nebius Group (NBIS), and Cerebras Systems (CBRS) are among the major companies reporting results.
