Dow, Nasdaq, S&P 500 Futures: How Markets Are Trading After July CPI As More Inflation Data Looms

• Markets are awaiting July’s U.S. producer price index (PPI), expected on Thursday, while July retail sales data will drop on Friday.
• The inflation report reduced concerns for a near-term hike in interest rates from the Federal Reserve, with data from the CME FedWatch tool showing that the probability of a Fed rate hike in September is down to 40.1% from 54.4% a week earlier. 
• On the geopolitical front, tensions between the U.S. and Iran continue to persist, without a concrete deal negotiation. 

U.S. stock futures were trading mixed in the overnight session late Wednesday after July’s consumer price index (CPI) matched expectations, tempering expectations for a near-term hike in the Federal Reserve’s interest rates. 

Meanwhile, markets are awaiting July’s U.S. producer price index (PPI), expected on Thursday, while July retail sales data will drop on Friday.

Dow futures were down 0.06%, while S&P 500 futures climbed 0.04%, and Nasdaq-100 futures gained 0.06% at 10:58 PM EDT.  

On Wednesday, the Nasdaq Composite and S&P 500 closed higher following the CPI reading, each adding 0.54% and 0.26%, respectively, at close. The Dow Jones Industrial Average closed marginally lower, down 0.04%. 

Key US Market Drivers

July’s CPI report was in focus for markets, with the print broadly matching market expectations. Headline CPI rose 0.1% month over month and 3.4% year over year, while core CPI increased 0.2% monthly and 2.5% annually. Both annual measures showed a slight moderation from June. 

The data alleviated inflation concerns that had been weighing on markets in recent sessions, particularly regarding their impact on the Federal Reserve’s interest rate decisions. 

David Rosenberg, Founder and President of Rosenberg Research & Associates Inc., said in a post on X, “The core CPI is running at the grand total of a +1.6% annual rate over the three months to July. The comparable this time last year was +2.7%. Inflation did show up last month in computers (thanks Apple!), airfares, toys, appliances, and used cars. But it didn’t show up anywhere else. The inflation-phobes will have to change their story at some point, and the three Fed dissenters will be pivoting before long.”

According to data from the CME FedWatch tool, the probability of a Fed rate hike in September is down to 40.1% from 54.4% a week earlier. 

However, not all market participants are convinced about the lower inflation reading. Economist Peter Schiff said in a post on X, “July’s 0.1% CPI rise is misleading. Energy prices fell because CPI compares monthly average prices. But oil and gasoline rose sharply during July after starting the month at depressed levels. That means July CPI still reflects May's oil price collapse, not July's sharp rebound.”

July’s PPI and retail sales data expected later this week are likely to provide further insights into the real condition of the U.S. economy at present. 

Meanwhile, a slew of tech-related earnings drove mixed moves in the market, with CoreWeave Inc. (CRWV) and several other technology stocks surging after their results, while Cisco Systems Inc. (CSCO), Cerebras Systems Inc. (CBRS) and Coherent Corp. (COHR) came under pressure after reporting results that failed to impress investors.

On the geopolitical front, tensions between the U.S. and Iran continue to persist, without a concrete deal being negotiated. U.S. President Donald Trump claimed on Wednesday that the U.S. has “total control” of the Strait of Hormuz and plans to maintain it, while an Iranian official said the waterway would remain blocked until Tehran’s demands are met. 

Meanwhile, Pakistan said it was working to bring Washington and Tehran to the negotiating table, with Interior Minister Mohsin Naqvi holding talks with Iranian officials. The U.S. Central Command also said it has redirected 59 commercial vessels, disabled three and boarded two since reinstating its naval blockade on Iran.

Global oil prices were trending lower at the time of writing. Brent crude futures expiring in October were down more than 1% to $87.97 a barrel. Meanwhile, WTI crude futures expiring in September were trading at $82.23 per barrel, down about 1.25% at the time of writing. 

Trending Stocks To Watch 

Ondas Inc. (ONDS): The drone-maker’s shares were up more than 2.5% in the overnight session late Wednesday in anticipation of its upcoming second-quarter (Q2) results due on Aug. 13 before the bell. Retail investors are betting that the defense technology company can extend its recent rally.

Nebius Group N.V. (NBIS): Shares of the company closed up more than 34% after it posted a 454% increase in revenue in the second quarter, zooming past Wall Street expectations.

Cerebras Systems Inc. (CBRS): Shares of the company plummeted more than 11% after-hours after its Q2 results. Although revenue surged 74% to $180.1 million, the company posted a $450.5 million net loss, weighed down by $386.6 million in stock-based compensation.

Omeros Corp. (OMER): The company’s stock jumped more than 16% after-hours after revenue from YARTEMLEA, its newly launched rare-disease drug, nearly tripled to $32.2 million in Q2, driving $1.8 million in adjusted net income and beating expectations.

Other Market Trends 

Yields on the 10-year Treasury were at 4.676% at the time of writing, while spot gold prices increased to $4,409.49 per ounce. 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ) edged higher at the time of writing, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was flat. 

The iShares 20+ Year Treasury Bond ETF (TLT) was up 0.22% amid ‘bearish’ sentiment.

Asian markets were trading mixed on Wednesday. South Korea's KOSPI, Japan’s Nikkei 225 and China’s SSE Composite all climbed higher at the time of writing, while Australian stocks were trading in the red.  

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