Stock Market Today: Dow futures rise as traders await July PPI inflation report
How are stock index futures traded?:
S&P 500 futures rose 0.3%.
The Dow Jones Industrial Average futures rose 0.2%.
Nasdaq 100 futures rose 0.5 percent.
On MondayThe Dow Jones Industrial Average fell 141 points, or 0.36%, to 39,357, the S&P 500 rose 0 points, or 0%, to 5,344 and the Nasdaq Composite gained 35 points, or 0.21%, to 16,781.
Futures show that stocks will continue their recovery after last week’s slump, but at the same time, investors will be paying attention to data in the coming days, which could affect the likelihood of a rate cut next month.
The Producer Price Index report will be released at 8:30 a.m. Eastern Time on Tuesday, Consumer Price Index data will be released on Wednesday and Retail Sales on Thursday; all data cover July.
For equity investors, the ideal scenario would be for inflation at the factory and on the high street to continue to approach the Federal Reserve’s 2% target, while retail sales would suggest a reasonably positive mood among households.
“Optimistically, markets seem to be overlooking possible mini-spikes in the consumer price index – unless, of course, the numbers are way too high and exceed expectations,” says Stephen Innes, managing partner at SPI Asset Management.
“This scenario would challenge assumptions about the Fed’s ability to move to more aggressive rate cuts to ensure a soft (economic) landing,” Innes adds.
The general mood on the markets is now much more relaxed than it was just over a week ago, when concerns about overvalued technology companies, fears of a recession in the US and the apparently forced liquidation of positions related to the Japanese yen carry trade caused volatility to rise.
On Tuesday, the CBOE VIX index, a measure of the expected volatility of the S&P 500 and known as Wall Street’s fear barometer, was trading at around 20, well below the 65 mark to which it had soared during last week’s stock market crash.
