US stock futures were little changed in premarket trading on Wednesday as traders waited for the July CPI report. The market is sitting still because the numbers could shift the Fed's September rate decision from a hold to a hike.
Dow Jones Industrial Average Futures Flat
Futures on the Dow Jones Industrial Average traded flat, while S&P 500 futures edged up 0.2% and Contracts for the Nasdaq-100 rose 0.6%. That split shows how little conviction traders had before the release, even with inflation still at the center of the market's next move.
Economists expected the Consumer Price Index to rise 3.4% from a year earlier in July and 0.1% from the prior month, easing from June's 3.5% annual increase. A hotter reading would strengthen the case for the Fed to raise rates in September, while signs of further inflation easing would leave room to hold steady.
Traders and Fed Pricing
As of Tuesday, traders were pricing in roughly a 50-50 chance of a rate hike in September. That split followed a softer-than-expected July jobs report and came against a backdrop of higher global yields, with the 30-year Treasury yield holding at 5.24% and South Korea's 30-year government bond yield climbing to a record.
Brent crude futures also rose close to $90 per barrel, keeping another inflation input in view. Cisco Systems, Coherent Corp., Nebius Group, and Cerebras Systems were among the major companies reporting results, but the day's bigger swing factor remained the July Consumer Price Index.
For traders, the immediate read is simple: the report could tip September expectations either way. If the July CPI print comes in hot, rate-hike odds should firm; if it cools further, the market gets more room to price a hold.
July Consumer Price Index
The only number that really matters now is the one about to hit. Until the July Consumer Price Index lands, futures may stay muted and the Fed path will remain split down the middle.
