The major index futures are pointing to a nervous start ahead of the consumer price inflation report that is due at 8:30 a.m. EDT. Bond yields are slipping ahead of the inflation data. If the report confirms a continued let-up in pricing pressure, the Federal Reserve may be forced to cut rates. Economists and strategists expect Fed Chair Jerome Powell to render more clarity on the rate outlook at the Jackson Hole symposium scheduled for later this month.
Atlanta Federal Reserve President Raphael Bostic, however, suggested he would want to see more evidence before the rate could be taken down from its 22-year high.
Hon Hai Precision Industry Co. Ltd.’s HNHPF commentary about strong AI server demand could lend support to Nvidia Corp. NVDA and other AI-levered tech stocks.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.07% |
| S&P 500 | +0.05% |
| Dow | +0.01% |
| R2K | +0.44% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY edged up 0.06% to $542.34, and the Invesco QQQ ETF QQQ rose 0.05% to $462.81, according to Benzinga Pro data.
Cues From Last Session:
Stocks raced out of the gate on Tuesday after a tamer-than-expected producer price inflation report perked up risk appetite. The VIX at one point in time pulled back below the 18 level. All three major averages opened higher and advanced further over the course of trading before ending notably higher. The tech-heavy Nasdaq Composite and the S&P 500 indices closed at their highest levels since Aug. 1. In the process, the S&P 500 posted the biggest four-day rally for the year.
Technical analyst and CNBC contributor Frank Cappelleri noted that the S&P 500 has advanced 4.8% over six sessions, the best six-day gain since the 6% rise between Oct. 30, 2023 and Nov. 6, 2023.
| Index | Performance (+/) | Value |
| Nasdaq Composite | +2.43% | 17,187.61 |
| S&P 500 Index | +1.68% | 5,434.43 |
| Dow Industrials | +1.04% | 39,765.64 |
| Russell 2000 | +1.61% | 2,095.19 |
Insights From Analysts:
Commenting on the market recovery post-Monday’s meltdown, fund manager Louis Navellier said, “Barring any major geopolitical surprises, it appears likely that the recovery from the recent correction will continue, though with caution rather than the strong melt-ups we’ve seen this year.”
“The NVIDIA earnings on Aug. 28 will be pivotal to a full recovery,” he said.
Upcoming Economic Data:
The July consumer price inflation report is the lone piece of first-tier data due on Wednesday. Here’s how the expectations compare to the prior periods:
| Consensus | June Performance | |
| Consumer Prices (M-o-M) | +0.2% | -0.1% |
| Consumer Prices (Y-o-Y) | +3.0% | +3.0% |
| Core consumer prices (M-o-M) | +0.2% | +0.1% |
| Core consumer prices (Y-o-Y) | +3.2% |
The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. EDT.
See Also: How To Trade Futures
Stocks In Focus:
- Peloton Interactive, Inc. PTON climbed nearly 7% in premarket trading after the company announced a content partnership with Alphabet, Inc.’s GOOGL GOOG Fitbit.
- Kellanova K rose about 6.50% after the Wall Street Journal reported Mars, Inc. is nearing a deal to buy the former.
- Cardinal Health, Inc. CAH, Brinker International, Inc. EAT and Performance Food Group Company PFGC are among the notable companies reporting earnings ahead of the market open.
- Those reporting after the close include Cisco Systems, Inc. CSCO and Lumentum Holdings Inc. LITE.
Commodities, Bonds And Global Equity Markets:
Crude oil futures edged down, signaling that the black gold may extend the 2%+ drop seen in the previous session, and gold futures rose modestly. The 10-year Treasury- note yield slipped 1.7 basis points to 3.837%. Bitcoin BTC/USD continued its climb and traded above the $61K level.
The Asian markets advanced, as traders cheered Wall Street’s buoyant performance overnight and began to price in a Fed rate cut. The Chinese and Hong Kong markets, however, bucked the uptrend. European stocks were modestly higher in early trading, with UBS AG’s UBS lending support to financial stocks.
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