TLDR
- Nasdaq 100 futures rose 0.5% and S&P 500 futures added 0.2% ahead of Wednesday’s CPI report
- CoreWeave, Lumentum, and Super Micro beat earnings expectations, boosting AI sentiment
- July CPI inflation is forecast at 3.4% annually, down from 3.5% in June
- The Federal Reserve’s September rate decision hinges on the inflation reading
- Strait of Hormuz tensions pushed Brent crude near $90 per barrel for a sixth straight session
Stock futures edged higher Wednesday morning after a string of strong AI-related earnings gave investors a reason to buy ahead of a key inflation report.
Nasdaq 100 futures rose 0.5%. S&P 500 futures gained 0.2%. Dow Jones futures were effectively flat.
The gains followed two straight sessions of losses across the major indexes. Investors had been sitting on their hands, waiting for fresh data.
AI Earnings Spark Optimism
CoreWeave, Lumentum, and Super Micro all reported quarterly results that topped analyst expectations. The numbers pointed to continued demand for AI infrastructure.
Deutsche Bank macro strategist Henry Allen said the reports “led to renewed optimism on the AI trade.”
Super Micro designs servers used in AI data centers. Lumentum makes optical networking gear critical to high-speed data transmission. CoreWeave is a cloud computing company focused on GPU workloads.
The earnings helped shift the mood overnight, even as the broader market remains cautious.
CPI Report Is the Main Event
All eyes are now on the July consumer price index report, due Wednesday morning. Economists expect headline inflation to come in at 3.4% year-over-year, down from 3.5% in June.
Monthly CPI is forecast to rise 0.1%, after falling 0.4% in June. Core CPI, which strips out food and energy, is expected to rise 0.2% month-on-month.
The report matters because the Federal Reserve is weighing whether to hike rates again at its mid-September meeting.
A recent softening in the jobs market has already reduced expectations for a September hike. But a hotter inflation print could bring those bets back.
Markets are near record highs, making investors especially sensitive to any surprise in the data.
Hormuz Tensions Keep Oil Elevated
Geopolitical pressure is also in the mix. U.S.-Iran talks over reopening the Strait of Hormuz have stalled.
Iran is demanding the release of frozen assets and a U.S. withdrawal from regional conflicts. President Trump has called for Iran to pay reparations instead.
Brent crude rose for a sixth straight day, nearing $90 per barrel.
Houthi rebels reported an attack on commercial shipping in the Bab el-Mandeb Strait that killed four cargo-ship crew members and two Yemeni rescuers. The U.S. Navy also disabled a Panama-flagged vessel near the Gulf of Oman.
The combination of stalled diplomacy and fresh attacks on shipping lanes has kept oil prices elevated and investor nerves on edge heading into the CPI print.
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