US futures steady as markets await CPI data and geopolitical tensions lift oil
Investors brace for July Consumer Price Index figures that could dictate Federal Reserve rate decisions, while Middle East tensions and elevated bond yields complicate the outlook.
US stock futures traded little changed in premarket trading on Wednesday as investors awaited fresh Consumer Price Index data, a release that could significantly influence the Federal Reserve’s interest rate decisions. Futures on the Dow Jones Industrial Average remained flat, while those on the S&P 500 edged up 0.2%. Contracts for the Nasdaq-100 rose 0.6%, marking a relatively quiet week in markets following the tail end of earnings season.
Economists expect the July CPI to rise at a slower annual rate of 3.4%, compared to June’s 3.5% increase, with a month-on-month climb of 0.1%. The inflation print will be closely scrutinised following a softer-than-expected July jobs report. A hotter-than-expected figure could strengthen the case for the Fed to raise rates in September, while signs of further inflation easing could provide the central bank with 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, adding pressure to the macroeconomic landscape. In the US, the 30-year Treasury yield remained at 5.24%, while South Korea’s 30-year government bond yield climbed to a record high. These elevated yields reflect broader market anxiety as investors weigh the potential for persistent price pressures against slowing economic activity.
Ongoing tensions in the Middle East serve as the backdrop propping up inflation and yields, with the US and Iran remaining 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. This escalation has lifted Brent crude futures close to $90 per barrel, introducing further volatility into energy markets and global supply chains.
On the corporate front, several major companies are reporting earnings results, including Cisco Systems, Coherent Corp, Nebius Group, and Cerebras Systems. These disclosures will provide additional insight into sector-specific performance amid the broader uncertainty surrounding monetary policy and geopolitical risk.
