United States stock futures edged lower on Monday evening (Tuesday AEST) as investors positioned for a key inflation reading that could influence the Federal Reserve’s near-term interest rate strategy.
By 8:45 am (10:45 pm GMT), futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 were each down 0.1%.
Traders are closely watching the July consumer price index (CPI) report, with the S&P 500 hovering near record territory. Markets expect headline CPI to rise 0.2% month-on-month and 2.8% year-on-year, while core CPI, which excludes food and energy, is forecast to climb 0.3% on the month and 3% over the year.
ANZ analysts commented in a note to clients: "The July CPI report will be scrutinised for the impact of tariffs on goods prices and whether higher tariffs are having a broader impact on prices. In the June data, there was evidence that tariffs boosted prices in some categories.
"It will be important to watch if core inflation ex-tariffs and core services inflation are continuing at a subdued pace. If so, that would argue that tariff impacts may be transitory.
"We think profit margin compression and weakening federal, business and consumer demand will limit both the pass-through and persistence of tariff-driven price rises."
President Donald Trump’s decision earlier on Monday to extend his 90-day pause on increased tariffs for Chinese goods was largely brushed aside by markets.
Attention will also turn to Thursday’s producer price index (PPI) for a gauge of wholesale inflation.
Both the CPI and PPI data will precede the Federal Reserve’s annual Jackson Hole symposium at the end of August, which could set the tone for its September policy meeting.
According to the CME Group FedWatch Tool, markets are currently assigning an 85.9% probability to a rate cut next month.
