US stock index futures flat ahead of key CPI data release

U.S. stock index futures traded largely unchanged Wednesday as investors hunkered down ahead of key consumer inflation data that is likely to factor into the outlook for interest rate cuts.

At 06:20 ET (10:20 GMT), Dow Jones Futures fell 14 points, or 0.1%, S&P 500 Futures traded largely flat, while Nasdaq 100 Futures rose 3 points, or 0.1%. 

A softer-than-expected producer inflation reading sparked a rally on Wall Street, helping U.S. benchmarks reach levels seen before a severe rout last week. 

The S&P 500 rose 1.7%, the NASDAQ Composite rose 2.4%, and the Dow Jones Industrial Average climbed more than 400 points, or 1%. CPI data awaited for more rate cut cues 

The focus was squarely on consumer price index inflation data, due later Wednesday.

The reading is expected to show inflation eased slightly in July, which, coupled with a soft producer price index print on Tuesday, is likely to set the stage for a deeper interest rate cut by the Federal Reserve in September. 

Traders are split over a 25 and 50 basis point cut in September, CME Fedwatch showed. But bets on a 50 bps cut slightly increased, standing at a 53% chance, after Tuesday’s PPI reading. 

The prospect of lower interest rates bodes well for stock markets, given that it frees up capital that can then be invested into the sector. Lower rates also help soothe concerns over slowing economic growth, after weak readings on the labor market sparked increased volatility on Wall Street.  Intel sells Arm stake 

In the corporate sector, Intel  (NASDAQ:INTC ) sold its 1.18 million share stake in British chip firm Arm Holdings (NASDAQ:ARM ) in the second quarter, a regulatory filing showed on Tuesday.

The chipmaker said earlier this month that it would cut more than 15% of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips.

The Wall Street Journal reported that chocolate giant Mars is looking to pay $83.50 for each share in packaged foods maker Kellanova (NYSE:K ), a 12% premium to Tuesday’s close, while valuing the firm at over $30 billion. Crude rise on US inventories draw 

Crude prices rose Wednesday, buoyed by industry data showing a bigger-than-expected draw in U.S. stockpiles. 

By 06:20 ET, the U.S. crude futures (WTI) climbed 0.1% to $78.38 a barrel, while the Brent contract rose 0.1% to $80.173 a barrel.

Data from the American Petroleum Institute  showed U.S. oil inventories shrank by 5.2 million barrels in the week to August 10, much more than expectations for a draw of 2 million barrels. 

The reading, if confirmed by official inventory data later in the day, showed that demand remained robust in the world’s biggest fuel consumer, even as the travel-heavy summer season wound down. 

(Ambar Warrick contributed to this article.)

Source: Investing.com