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U.S. stock futures rose on Wednesday as the dollar fell against its global peers as investors braced for a key inflation reading in July that could either cement the monetary tightening program of the Federal Reserve, or trigger a pullback in rate hike bets.
The headline CPI is expected to have declined last month from the 41-year high of 9.1% reached in June, potentially triggering a series of slower accelerations over the coming months. However, recent U.S. economic data has been mixed and last week’s jobs report, which included 528,000 new hires and 5.2% wage growth, could add to inflationary pressures as the economy approaches. ‘fall.
CME Group’s FedWatch is pricing in a 66.5% chance of a 75 basis point Fed rate hike in September, which would take its target rate to between 3% and 3.25%, the bulk of the expectations pointing to a range between 3.5% and 3.75% by the end of the year.
That kept the U.S. dollar index, which tracks the greenback against a basket of six peer global currencies, within touching distance of the two-decade highs it hit last month, a move that added significant headwinds to the outlook for corporate earnings as companies find it increasingly costly to bring profits overseas.
The dollar index was marked down 0.26% in overnight trade to 106.097 while yields on the benchmark 10-year Treasury were flat at 2.768% ahead of the inflation reading of July.
In overseas markets, European stocks remained essentially flat amid the traditional August holiday lull, with the Stoxx 600 up 0.06% at midday in Frankfurt, while overnight in Asia, the ex-Japan MCSI regional index fell 1.07% amid a pullback in Chinese stocks following data showing factory gate inflation fell to its lowest levels 17-month low amid falling demand for commodities in the world’s second-largest economy.
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The weaker inflation reading in China also added downward pressure on oil prices, with WTI crude futures for September delivery falling $1.23 to $89.27 a gallon before Department of Energy data on domestic crude inventories scheduled for 10:30 a.m. Eastern Time.
On Wall Street, futures tied to the S&P 500 point to an opening bell gain of 14.5 points while those tied to the Dow Jones Industrial Average are priced for a 65-point rise. Tech-focused Nasdaq-linked futures point to a 22-point lead.
In the tech space, Apple (AAPL) – Get the Apple Inc. Shares edged higher after Foxconn, the world’s largest electronics maker, reported better-than-expected second-quarter results on Wednesday but warned that lower demand for smartphones would keep revenue in check at the fall months are approaching.
You’re here (TSLA) – Get the report from Tesla Inc. and Twitter (TWTR) – Get the Twitter Inc. report. were the most active in premarket trading, however, following news late last night that CEO Elon Musk had sold roughly $7 billion worth of stock to set aside funding for his takeover. contested control of the social media platform.
waltz disney (SAY) – Get The Walt Disney Company Report Shares edged higher ahead of the media and entertainment giant’s third-quarter earnings after markets closed as investors focused on subscriber gains in its Disney+ steam-streaming division.
Coinbase global (PIECE OF MONEY) – Get the Coinbase Global Inc report Shares, meanwhile, fell 5.9% after the crypto trading platform posted a bigger-than-expected loss in the second quarter amid the continued decline in bitcoin and other digital tokens.
