U.S. stock futures rose on Wednesday after Tuesday’s rally. Futures of major benchmark indices were higher.
The inflation report, released Wednesday, showed headline annual inflation holding steady at 2.7%, but core inflation—which strips out volatile food and energy prices—accelerated to 3.1%.
This rise in underlying inflation for a second consecutive month complicates the Fed’s path, forcing it to weigh its mandate of price stability against supporting a potentially ailing jobs market.
Despite this, the CME Group’s FedWatch tool‘s projections show markets pricing a 96.2% likelihood of the Federal Reserve cutting the current interest rates for the Sept. 17 decision.
Meanwhile, the 10-year Treasury bond yielded 4.26% and the two-year bond was at 3.72%.
Futures
Change (+/-)
Dow Jones
0.19%
S&P 500
0.52%
Nasdaq 100
1.12%
Russell 2000
0.49%
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Wednesday. The SPY was up 0.19% at $643.90, while the QQQ advanced 0.24% to $581.45, according to Benzinga Pro data.
Cues From Last Session:
Communication services, information technology, and financial stocks led the S&P 500 in gains on Tuesday, with all sectors on the S&P 500 closing in positive territory.
U.S. stocks settled higher, and the S&P 500 surged more than 1% during the session, also closing at new record highs after July’s inflation data eased fears that tariff-related cost pressures were widespread.
The headline Consumer Price Index (CPI) came in below expectations, holding steady at 2.7% year-over-year and fueling speculation of upcoming interest rate cuts.
Airline fares, in particular, jumped 4% on a month-over-month basis, causing a rally in airline stocks.
President Donald Trump renewed public pressure on Fed Chair Jerome Powell, announcing that he was considering a major lawsuit against Powell over the Fed’s building renovation expenses.
WideOpenWest Inc. (NYSE:WOW) shares jumped 48% on Tuesday after the company agreed to be acquired for $5.20 per share.
The Dow Jones index ended 484 points or 1.10% higher at 44,458.61, whereas the S&P 500 index rose 1.13% to 6,445.76. Nasdaq Composite advanced 1.39% to 21,681.90, and the small-cap gauge, Russell 2000, gained 2.99% to end at 2,282.78.
Index
Performance (+/-)
Value
Nasdaq Composite
1.39%
21,681.90
S&P 500
1.13%
6,445.76
Dow Jones
1.10%
44,458.61
Russell 2000
2.99%
2,282.78
Insights From Analysts:
As the S&P 500 scaled its 16th all-time high of the year, it was also the fifth most of any year in history, as pointed out by Charlie Billelo of Creative Planning.
The S&P 500 closed at another all-time high, its 16th of the year. This follows 57 all-time high in 2024, the 5th most of any year in history. $SPX
As “markets are continuing to climb a wall of worry,” according to Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management, the bull market will persist as long as the unemployment rate remains low and inflation isn’t high enough to deter the Fed.
The prospect of a Fed rate cut, which seems more likely after recent jobs and inflation reports, is a major driver of this optimism. Zaccarelli suggests it’s rare for the Fed to cut rates when a recession isn’t imminent, a key factor that’s getting investors excited.
This positive sentiment isn’t just benefiting technology and growth stocks. Eric Teal, Chief Investment Officer for Comerica Wealth Management, highlighted that the prospect of rate cuts bodes well for “traditional value sectors and small cap stocks.” These areas have lagged the market and are now “primed to lead the market higher as breadth expands.”
The S&P 500’s V-shaped recovery after a 20% drawdown has been remarkably strong. Jurrien Timmer of Fidelity Investments pointed out that the index remains “in the running for the fastest and strongest recovery ever.”
Equities continued to plow ahead last week, recovering from the brief growth scare a week earlier following the lackluster jobs report. The S&P 500 index continues on its V-shaped recovery track and remains in the running for the fastest and strongest recovery ever following a… pic.twitter.com/TOJFHNqKLy
According to Louis Navellier, the bet on a September cut “jumped to over 90% from less than 84%” following the report’s release. This expectation fueled a relief rally in the stock market, with Navellier noting the market is showing “no fear of labor issues or inflation.”
Here’s what investors will be keeping an eye on Wednesday;
Richmond Fed President Tom Barkin will speak at 8:00 a.m., Atlanta Fed President Raphael Bostic will speak at 12:30 p.m., and Chicago Fed President Austan Goolsbee will speak at 2:00 p.m. ET.
Stocks In Focus:
CoreWeave Inc. (NASDAQ:CRWV) dropped 7.56% in premarket on Wednesday after reporting mixed second-quarter financial results. Its revenue of $1.21 billion beat analyst estimates of $1.08 billion, but the adjusted loss of 27 cents per share missed estimates of a loss of 17 cents per share.
CarParts.Com Inc. (NASDAQ:PRTS) tumbled 6.66% after reporting worse-than-expected second-quarter financial results and said it is not providing FY25 guidance as it evaluates strategic alternatives in response to its inbound interest.
Cisco Systems Inc. (NASDAQ:CSCO) was up 0.39% as it is expected to report earnings after the closing bell. Analysts estimate earnings of 98 cents per share on revenue of $14.62 billion.
Brinker International Inc. (NYSE:EAT) was 0.032% above the flatline as analysts expect it to report earnings of $2.38 per share on revenue of $1.42 billion before the opening bell.
Performance Food Group Co. (NYSE:PFGC) rose 0.11% as it is expected to report earnings before the opening bell. Analysts estimate earnings of $1.45 per share on revenue of $16.86 billion.
180 Life Sciences Corp. (NASDAQ:ATNF) surged 67.58% after the biotechnology company announced it had accumulated 82,186 Ethereum (CRYPTO: ETH) tokens valued at approximately $349 million as part of its aggressive treasury strategy pivot.
Webtoon Entertainment Inc. (NASDAQ:WBTN) zoomed 36.75% following second-quarter results that exceeded guidance and a strategic partnership with The Walt Disney Co. (NYSE:DIS).
Bolt Projects Holdings Inc. (NASDAQ:BSLK) climbed 44.50% following robust second-quarter earnings and news of potential financing worth up to $20 million.
Meta Platforms Inc. (NASDAQ:META) was up 0.18% after hitting a record on Tuesday as its Threads platform surpassed 400 million users, marking a significant milestone since its launch as a competitor to Twitter.
CAVA Group Inc. (NYSE:CAVA) tumbled 22.83% despite an earnings-per-share beat, as its second-quarter revenue missed estimates, leading to a decline in share price due to softer same-store sales growth expectations.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 0.71% to hover around $62.72 per barrel.
Gold Spot US Dollar rose 0.18% to hover around $3,354.08 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was 0.39% lower at the 97.7150 level.
Asian markets were mostly higher on Wednesday, except Australia’s ASX 200 index. South Korea’s Kospi, India’s S&P BSE Sensex, China’s CSI 300, Hong Kong’s Hang Seng, and Japan’s Nikkei 225 indices rose. European markets were higher in early trade.
