Traders work on the floor of the New York Stock Exchange at the opening bell on April 9, 2025.
Timothy A. Clary | Afp | Getty Images
Stock futures rose early Tuesday as investors breathed a sigh of relief over a tamer-than-expected inflation report.
Futures tied to the Dow Jones Industrial Average added 278 points, or 0.6%. Nasdaq 100 futures rose 0.8%, and S&P 500 futures traded 0.6% higher.
Tuesday’s fresh inflation data release reassured investors, who have feared that President Donald Trump’s broad tariff policies could spike prices in the U.S. economy.
The consumer price index rose 2.7% on an annualized basis in July, while a Dow Jones estimate had called for a 2.8% rise. So-called core CPI, which strips out volatile food and energy prices, increased by 3.1% year on year — slightly more than the expected 3%.
Shares of Intel added 4% on Tuesday morning after President Donald Trump flip-flopped his view on Intel CEO Lip-Bu Tan, calling him a “success” days after demanding his resignation. Stablecoin issuer Circle Internet Group jumped 11% after reporting a 53% year-over-year rise in its second-quarter revenue.
Investors are hoping that this latest reading will shed some potential insight into how the Federal Reserve will handle short-term interest rates, especially as the S&P 500 hovers near an all-time high. The report comes as traders weigh the latest developments on the tariff front. President Donald Trump said Monday he’d extend a 90-day pause on higher levies on Chinese goods.
“Investors seem to be betting on upcoming interest rate cuts and counting on them to counteract the drag from tariffs. We think it is too early to make that assumption,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “The degree of tariff impacts and how long they will take to work through the economy remain open questions. In the meantime, high equity valuations may heighten the impact any negative developments have on stock returns.”
Wall Street will also parse Thursday’s producer price index report for a reading on wholesale inflation. Both reports come ahead of the Fed’s Jackson Hole gathering at the end of August, ahead of the central bank’s September policy meeting. The market is currently pricing in a nearly 91% chance of a rate cut next month, per trading data from the CME’s FedWatch Tool.
