US stock futures struggled on Wednesday as Wall Street braced for another inflation checkup after the latest consumer price reading spurred traders to pare bets on Federal Reserve interest-rate cuts.
Dow Jones Industrial Average futures (YM=F) traded flat after the blue-chip index lost over 400 points in the prior session, while S&P 500 futures (ES=F) were also little changed. Those on the Nasdaq 100 (NQ=F) fell 0.3% after a tariff-fueled growth warning from chip gear maker ASML (ASML).
Markets are reassessing in the wake of Tuesday’s CPI report showing inflation accelerated in June. It rose at its fastest year-over-year clip since February, with signs of tariff-driven inflation starting to show up in the data.
That has led to more speculation that the Fed will stand pat on rates not just this month — an outcome that seems virtually guaranteed at this point — but also in September, even as President Trump pushes furiously for cuts.
According to the CME Group, bets on a September cut are near 50-50, with bets on a hold surging over the last month. The moves weighed on Treasurys, with the 10-year yield (^TNX) rising to near 4.5% and the 30-year yield (^TYX) pushing past 5% for the first time since early June.
Markets will get another inflation pulse check on Wednesday with the release of the Producer Price Index, which measures wholesale inflation before prices reach consumers. Like consumer prices, the PPI is expected to show a pickup in inflation last month.
Read more: The latest on Trump’s tariffs
As the market attempts to digest the early effects of Trump’s tariffs, he has plowed ahead with plans to impose increased duties next month on key trading partners, including the European Union, Canada, and Mexico. Trump announced Tuesday that the US had reached a deal with Indonesia as it continues talks.
Read more: Full earnings coverage in our live blog
Meanwhile, earnings season kicked off in earnest Tuesday with big banks reporting mixed results. Goldman Sachs (GS) and Morgan Stanley (MS) are up Wednesday, along with Johnson & Johnson (JNJ) and United Airlines (UAL).
LIVE 4 updates
