Market Snapshot: U.S. stock futures edge higher as wary traders eye crucial inflation report

United States

U.S. stock futures jumped on Wednesday, after the July U.S. consumer-price index report showed a slowdown of headline inflation from June, primarily thanks to falling energy prices.

How are stock-index futures trading
  • S&P 500 futures ES00, +1.58% rose 67 points, or 1.6% to 4,191
  • Dow Jones Industrial Average futures YM00, +1.22% added 410 points, or 1.3% to 33,144
  • Nasdaq-100 futures NQ00, +2.13% gained 301 points, or 2.3% to 13,336

On Tuesday, the Dow Jones Industrial Average DJIA, -0.18% fell 0.2% to 32774, the S&P 500 SPX, -0.42% declined 0.4% to 4122 — its fourth-straight losing session — and the Nasdaq Composite COMP, -1.19% dropped 1.2%, to 12493, its third consecutive drop.

What’s driving markets

The July U.S. consumer-price index (CPI) report released at 8.30 a.m. Eastern showed a cooling headline inflation and a sticky core inflation.

The consumer price index was unchanged in July, compared with the 1.3% gain in the prior month, according to the Labor Department. Economists polled by The Wall Street Journal had estimated a 0.2% gain in July.

The rate of inflation in the 12 months ended in July slowed to 8.5% from a 41-year high of 9.1% in June.

The closely-watched core measure of inflation that omits volatile food and energy prices rose 0.3% in July, a slower pace from a 0.5% gain in the prior month. The 12-month rate remained steady at 5.9%.

Investors have been eager to see that inflation has peaked. Equities have been roiled in 2022 but despite bouncing off its mid-June low, the S&P 500 index remains down 13.5% for the year to date. The drop has been driven by fears that multidecade-high inflation will batter consumer confidence, cause the Federal Reserve to hike borrowing costs aggressively and tip the U.S. economy into recession.

See: U.S. consumers likely got some relief from sizzling price increases in July but Fed won’t feel any better

After the inflation report was released, the dollar index DXY, -1.09% was down 1% to 105.28 and U.S. 10-year Treasury yields TMUBMUSD10Y, 2.716% eased 7.9 basis points to 2.705%.

Damping sentiment is a recent rash of poorly-received corporate news. There is particular concern about the health of the semiconductor sector after Micron MU, -3.74% followed Nvidia NVDA, -3.97% with a warning about revenues. The PHLX Semiconductor Index SOX, -4.57% fell 4.6% on Tuesday and is down 27.4% so far in 2022.

In addition, a recent rally in badly battered former bull market darlings has come to a juddering halt in the past few sessions, also hurting retail investor confidence. And some are due for more pain on Wednesday.

Shares in crypto exchange Coinbase COIN, -10.55% were down a further 5.5% in premarket action after reporting a billion dollar second quarter loss, and Roblox RBLX, -3.17%, the videogame group, plunged 17.4% after a key sales metric declined for the second consecutive quarter.

Companies in focus
  • Sweetgreen Inc. SG, -4.21% shares plunged 22.8% after the salad restaurant chain’s second-quarter financial results missed Wall Street’s expectations. 
  • Shares of Plug Power Inc. PLUG dipped 0.6% in premarket trading Wednesday after the hydrogen fuel-cell company fell shy of expectations with its latest revenue and earnings.
  • Wendy’s Co. WEN, -0.47% shares lost 0.5%, after the fast-food company posted weaker-than-expected revenue for the second quarter. 
How are other assets faring
  • Oil futures were softer, with U.S. WTI CL.1, -0.28% off 0.8% to $ 89.73 a barrel.
  • Gold GC00, -0.04% fell 0.3% to $ 1,807 an ounce and bitcoin BTCUSD, +3.80% lost 0.8% to $ 22,964.
  • Asia markets were softer following Wall Street’s overnight lead and after data showed China’s inflation at a two-year high. The Shanghai Composite SHCOMP, -0.54% lost 0.5%, Hong Kong’s Hang Seng HSI, -1.96% shed 2.2% and Japan’s Nikkei 225 NIK, -0.65% fell 0.65%. In Europe the Stoxx 600 SXXP, +0.68% retreated 0.2%.