Dow Jones Today: US Stock Futures Lower Ahead of Key Inflation Data Release

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Major stock indexes were mixed in early trading after a government report on consumer prices showed that inflation continued to moderate last month, boosting expectations the Federal Reserve will soon start cutting interest rates.

The Dow Jones Industrial Average, was down 0.2%, while the S&P 500 and Nasdaq Composite were both up fractionally. The S&P 500 and Nasdaq are looking to extend a seven-session winning streak, while the Dow is nearing 40,000 points for the first time since mid-May.

The recent rally has been fueled by the strong performance of tech stocks and hopes the Fed will cut its benchmark fed funds interest rate soon.

The Fed has said it’s waiting for more evidence that inflation is under control before easing policy, and Thursday morning’s June consumer price index report likely falls into that category. Consumer prices unexpectedly fell in June from the month before, putting the annual rate at 3%, less than the 3.3% in May and closer to the Federal Reserve’s goal of 2%.

Traders are now pricing in about an 89% chance that the Fed will start cutting interest rates in September, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. That’s up from a 73% likelihood of a cut that was being priced in yesterday.

The yield on 10-year Treasurys fell below 4.2% after the CPI release, down from near 4.3% before the report.

Among stock movers, Delta (DAL) shares were down sharply after the airline reported a 29% year-over-year drop in second-quarter profit amid higher fuel costs and heavy discounting. Pepsi (PEP) shares were also losing ground after the company reported earnings.

Costco (COST) shares were up after the retailer hiked its membership fees for the first time since 2017 and posted a jump in June sales.

Nvidia (NVDA), which along with other chipmakers has helped lead the broader market’s recent rally, was up again Thursday morning. The stock is trading near its record high.

Stock Futures Lower Ahead of CPI Inflation Report

1 hr 55 min ago

Futures contracts connected to the Dow Jones Industrial Average were down 0.2% about half an hour before the release of the closely watched inflation data.

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S&P 500 futures slipped 0.1%.

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Nasdaq 100 futures were also off 0.1%.

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