US inventory futures blended as market rejects inflation report

Traders work on the trading floor of the New York Stock Exchange.

NYSE

US stock futures were mixed on Wednesday night after the market shook off July inflation report and the Dow Jones Industrial Average and S&P hit 500 records.

Dow futures rose 9 points, or 0.03%. S&P 500 futures and Nasdaq 100 futures fell 0.02% and 0.14%, respectively.

In the regular trading session, the Dow rose 0.6% to hit 35,484.97 and closed on a new high. The S&P 500 rose 0.2% to an all-time high of 4,447.70. The Nasdaq Composite was trading approximately 0.1% lower to 14,765.13.

The Ministry of Labor reported that the consumer price index was up 5.4% for July, up 0.5% from the previous month.

However, core inflation rose only 0.3% in July (and 4.3% yoy). Core inflation excludes energy and food prices and is viewed by economists as a more reliable measure because energy and food prices can be so volatile.

“Inflation has at least taken a break,” said Brad McMillan, chief investment officer for the Commonwealth Financial Network. “For both the headlines and the core figures, the monthly and annual figures were stable or lower than in the previous month. Based on these data, inflation has certainly not risen unstoppably.”

Government bond yields fell after the inflation report and a 10-year promissory note auction showed strong demand. Dallas Fed President Robert Kaplan told CNBC that the Fed should begin removing incentives in October, compounding the decline in yields.

“The history of inflation is more about isolated components than general price increases, and even those components are showing signs of peaking,” said McMillan. “If we look at the numbers, inflation is above what it was, but is showing signs of a rollover and a return to more comfortable levels.”

Investors are keeping an eye on the weekly unemployment claims data, which is released Thursday morning.

Build Asset Management’s Dustin Qualley said he expected a sustained decline that would help the narrative of a stronger job market.

This is a more common indicator than the pay slips, ”he said. “If the expectations rise unexpectedly, I fear that this recovery will take longer than expected. An unexpected spike in payrolls would be bullish on interest rates. “

Baidu is expected to report on the gains before the opening bell. Palantir and CyberArk Software will also be reporting later in the day.