Nasdaq 100 futures, S&P futures extend some losses after mixed July inflation data
Investing.com -- U.S. stock index futures on Wednesday saw a slight downward move after key headline inflation measures for July came in marginally hotter than expected. Traders also appeared to be cautious ahead of artificial intelligence poster child Nvidia’s quarterly results later in the day.
At 08:34 ET (12:34 GMT), benchmark S&P 500 futures shed 0.1% while tech-heavy Nasdaq 100 futures dipped 0.3%. Blue-chip Dow futures were up 0.1%.
Wall Street’s three main averages closed higher on Tuesday. The Dow Jones Industrial Average and the S&P 500 gained 0.3% each, while the NASDAQ Composite advanced 0.7%. Artificial intelligence-linked stocks helped fuel the advance, with Nvidia rising 2.2% and AMD adding 4.9%. Get fresh market insights with an InvestingPro subscription -- now 55% off
The focus on Wednesday was on the July personal consumption expenditures (PCE) price index report before the opening bell. The core PCE is widely seen as the Federal Reserve’s preferred inflation gauge.
As per the Bureau of Economic Analysis, core PCE ticked up 0.2% M/M and 3.3% Y/Y in July, matching expectations. The M/M figure accelerated from June, while the Y/Y reading remained the same. On a headline basis, PCE increased 0.2% M/M and 3.7% Y/Y in July, just above expectations. Similar to core, the M/M number picked up from June, while the Y/Y measure was flat.
Concerns have abounded that an energy shock caused by the war in the Middle East will create sticky price pressures which will, in turn, persuade the Fed to hike rates. In theory, higher borrowing costs can help quell inflation, albeit at the risk of weighing on the broader economy.
Markets have lowered their pricing for a rate increase at the Fed’s September meeting, although Boston Fed President Susan Collins warned in an essay that without more sustained disinflation, tighter policy would soon be “appropriate.”
Nvidia to report
Following the close of U.S. markets, Nvidia will step into the spotlight when it unveils its much-anticipated fiscal second-quarter results.
The semiconductor giant has become a bellwether of the AI era, with investors routinely expecting the firm to log blockbuster sales of its cutting-edge chips that power the nascent technology.
According to LSEG data cited by Reuters, Nvidia’s quarterly revenue is seen doubling from a year ago to a mammoth $92.18 billion, thanks largely to solid data center sales. At that pace, revenue would grow at its fastest rate in seven quarters.
Traders will also likely be keen to see the extent to which Nvidia expects its customers to switch from using its Blackwell chips to its next-generation Vera Rubin processors. However, concerns have swirled around the sustainability of an AI infrastructure spending spree by Nvidia’s megacap clients, especially after these companies flagged pressure on free cash flows in their own recent earnings reports.
Elsewhere, shares of Intuit sank by more than 12% in premarket U.S. trading after the TurboTax maker’s annual revenue forecast came in below expectations. The group has faced fears of intensifying competition from similar tax services performed by AI-powered large language models.
Beyond earnings, hopes for progress in diplomatic efforts to halt hostilities in the Middle East and unblock the Strait of Hormuz sent the price of benchmark Brent crude futures down below $90 a barrel.
Russia’s RIA Novosti news agency reported that the U.S. and Iran had agreed to a new ceasefire agreement which would be announced in the coming days. Investing.com could not immediately verify the report, which cited Iranian and Pakistani sources.
Meanwhile, a top Iranian official has said Iran and Oman have agreed on a new temporary route through the strait after diplomats held talks in Tehran, Al Jazeera has reported. But the official stressed that the strait will not reopen completely until the U.S. follows its commitments made in a framework ceasefire deal signed in June.
Ayushman Ojha and Scott Kanowsky contributed to this article