Dow Jones futures rose by 0.08% to approximately 53,910 during European trading hours on Thursday, while S&P 500 futures increased by 0.09% to around 7,780 and Nasdaq 100 futures advanced 0.06% to near 29,870 [1]. This uptick in US stock futures was driven by shifting Federal Reserve rate expectations following softer inflation data. Specifically, July’s headline Consumer Price Index (CPI) declined slightly to 3.4% year-over-year, and core CPI cooled to 2.5%, in line with market forecasts [1].
The moderation in inflation has reinforced market expectations for a more accommodative stance from the Federal Reserve. According to the CME FedWatch tool, the probability of a September rate hike dropped to roughly 36% from 48% just a day earlier [1]. Investors are now awaiting the US Producer Price Index (PPI) data for July, which is due later in the day [1].
On Wednesday, US stock indices closed mostly higher, buoyed by strong earnings from AI companies and the moderate CPI report. The Nasdaq gained 0.7%, the S&P 500 rose 0.3% to approach near-record levels, while the Dow Jones ended virtually flat [1].
Rabobank issued a note of caution regarding the current enthusiasm around AI, warning that the boom is unlikely to be a one-way bet and highlighting potential national-security implications. The bank suggested that the public-good dimension of AI could ultimately cap private returns, as government and military interests may seek to benefit from the technology at a lower cost [1].
CONCLUSION
Cooling inflation data has eased market concerns about further Federal Reserve rate hikes, leading to modest gains in US stock futures and indices. While optimism persists, especially around AI-driven earnings, analysts caution that national-security considerations could temper long-term private sector returns. Investors remain focused on upcoming PPI data for additional market direction.