Stock Market Today: Live Updates
Stock Futures Edge Higher Ahead of Key Inflation Data
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U.S. stock futures ticked slightly higher Tuesday as investors await the release of the July consumer price index report, hoping for clues about the Federal Reserve’s next move on interest rates.
Market Snapshot
Dow Jones Industrial Average futures added 61 points, or 0.1%. Nasdaq 100 futures and S&P 500 futures traded just above the flatline.
The anticipation surrounding the CPI report is particularly strong as the S&P 500 hovers near an all-time high, making the market sensitive to any signals about the future path of monetary policy. Investors are weighing whether recent economic strength will allow the Fed to maintain its current course or if cooling inflation will necessitate a shift towards easing.
Inflation Report Details
Economists polled by Dow Jones expect the CPI to rise 0.2% month-over-month in July and 2.8% on an annualized basis. Core CPI, excluding volatile food and energy prices, is forecast to increase 0.3% month-over-month and 3% year-over-year.
This data will be crucial in assessing whether the disinflationary trend observed earlier in the year is continuing. A stronger-than-expected reading could raise concerns about persistent inflation and perhaps delay anticipated interest rate cuts. Conversely, a weaker report might reinforce expectations for a more dovish Fed stance.
Tariff Developments and Economic Concerns
The inflation report arrives alongside developments on the tariff front. President Donald Trump announced a 90-day extension on higher levies on Chinese goods, offering a temporary reprieve from escalating trade tensions. Though, the long-term impact of tariffs remains a concern for investors.
Brent Schutte, chief investment officer at northwestern Mutual Wealth Management, cautioned against relying solely on expectations of interest rate cuts to offset the negative effects of tariffs. “Investors seem to be betting on upcoming interest rate cuts and counting on them to counteract the drag from tariffs. We think it is too early to make that assumption,” he stated.”The degree of tariff impacts and how long they will take to work through the economy remain open questions. In the meantime, high equity valuations may heighten the impact any negative developments have on stock returns.”
Impact of Tariffs on the Economy
Tariffs introduce costs throughout the supply chain, potentially leading to higher prices for consumers and reduced profitability for businesses. The uncertainty surrounding trade policy can also dampen investment and economic growth.While the extension of the pause on new tariffs provides some short-term relief, the underlying trade dispute remains unresolved.
Looking ahead: PPI and Jackson Hole
Beyond the CPI report,Wall Street will also be closely watching Thursday’s producer price index (PPI) report,which provides insights into wholesale inflation. both reports will inform the debate ahead of the Federal Reserve’s annual jackson Hole symposium later this month.
FedWatch Tool and Rate Cut probabilities
The market is currently pricing in an approximately 87% probability of a rate cut at the Fed’s September policy meeting, according to data from the CME Group’s FedWatch Tool.This reflects the prevailing expectation that the Fed will begin to ease monetary policy in response to slowing inflation and potential economic headwinds. However, the actual decision will depend on the incoming economic data, including the CPI and PPI reports, as well as the overall economic outlook.
The Jackson Hole gathering is often used by the Fed chair to signal future policy intentions, making it a key event for investors to monitor. Any hints about the timing or magnitude of future rate cuts could trigger meaningful market movements.