US pre-open: Futures little changed ahead of CPI reading

Wall Street futures were little changed ahead of the bell on Wednesday as market participants awaited key inflation data.

As of 1300 BST, Dow Jones and S&P 500 futures were both up 0.01%, while Nasdaq-100 futures had the index opening 0.01% lower.

The Dow closed 408.63 points higher on Tuesday, more than reversing losses recorded in the previous session.

Wednesday's primary focus will be last month's consumer price index reading from the Bureau of Labor Statistics, with economists expecting to see CPI rise by 0.2% month-on-month after June's 0.1% drop. On an annualised basis, CPI was expected to be 3.0% higher. On Tuesday, the BLS revealed that producer prices increased 0.1% to 144.67 points in July, up from 144.53 in June but short of preliminary estimates for a 0.2% month-on-month uptick. On an annualised basis, PPI was up 2.2%.

Trade Nation's David Morrison said: "The consensus expectation is that headline CPI will remain unchanged from the last reading at 3.0%. While still significantly above the Fed's 2% target, investors are likely to be relaxed if inflation steadies around here. And considering past performance, they should be even happier if headline breaks below the 3% figure. Core inflation has been more problematic, as it has proved far stickier and difficult to make additional downside progress. So, today's updates have the potential to cause a spike in volatility, should they come in outside market expectations. But it seems unlikely that they have the ability to derail expectations of a September rate cut, although the size of the cut remains uncertain."

Elsewhere on the macro front, mortgage applications surged 16.8% in the week ended 9 August, according to the Mortgage Bankers Association, the sharpest week-on-week increase since January 2023. Applications to refinance a home soared 35%, while applications to purchase a home were up a much more modest 3%.

In the corporate space, gambling giant Flutter was in the green in pre-market trading after posting Q2 results that came in ahead of expectations.

Reporting by Iain Gilbert at Sharecast.com