Dow futures get lift after cooler-than-expected inflation reading

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U.S. stock index futures erased losses, rising to a session high Tuesday, after the August consumer-price index rose less than expected.

What’s happening
  • Futures on the Dow Jones Industrial Average YM00, +0.34% rose127 points, or 0.4%, to 34,881.
  • S&P 500 futures ES00, +0.36% rose 0.4%, or 16.85 points, to 4,476.25.
  • Futures on the Nasdaq 100 NQ00, +0.37% rose 53.25 points, or 0.3%, to 15,483.25.

On Monday, the Dow DJIA, +0.76% jumped 262 points, or 0.8%, to end at 34869, ending a five-session losing run. The S&P 500 SPX, +0.23% rose 10 points, or 0.2%, to 4468, while the Nasdaq Composite COMP, -0.07% slipped 10 points, or 0.1%, to 15105.

What’s driving markets

The U.S. consumer price index rose 0.3% in August, while the core reading, which excludes volatile food and energy prices, was up just 0.1%.

The CPI increased 5.3% in the August year, compared to expectations for a 5.4% increase, and a rise of 5.5% for the year last month. The year-over-year change in core CPI fell back to 4% from 4.3% in July.

While the reading remains elevated, signs of peak inflation could make it less urgent for the Federal Reserve to begin scaling back its bond purchases, though investors have largely scaled back expectations for the central bank to lay out a timetable to begin tapering at its meeting next week.

Earlier, the National Federation of Independent Business said its small-business optimism index rose 0.4 point in August to 100.1. Small-business owners were somewhat more optimistic about the economy, but said record shortages of labor and supplies were cutting into sales and profits.

What companies are in focus?
How are other assets trading?
  • Chinese stocks continued to come under pressure, with the Shanghai Composite SHCOMP, -1.42% falling 1.4% and the Hang Seng HSI, -1.21% dropping 1.2%. Analysts continue to focus on the declining fortunes of property giant China Evergrande 3333, -11.87%, and a key slate of economics data is due on Wednesday.