Dow, S&P 500 and Nasdaq-100 futures rebounded Thursday after cooler-than-expected inflation data, a day after the major indexes sold off on the Federal Reserve's decision to hold rates steady. Nasdaq-100 futures gained the most among the three indexes, while Dow components moved in opposite directions.
Dow Jones Industrial Average futures rose 0.4% Thursday morning, while S&P 500 futures gained 0.7% and Nasdaq-100 futures advanced 1.7%, as traders digested fresh inflation and growth figures.
Wednesday's rate-hold selloff sets the stage
The rebound followed a Wednesday selloff, when the major indexes fell after the Federal Reserve left interest rates steady and Fed Chair Kevin Warsh said rising market rates have provided some tightening. President Donald Trump also reiterated his Iran threats that day.
West Texas Intermediate crude eased to $84 a barrel as the U.S. military launched airstrikes against Iran late Wednesday. The 10-year Treasury yield stood at 4.66%, and bitcoin traded near $64,900.
Inflation and growth data ease pressure
Early Thursday, the core PCE price index rose 0.1% in June, slightly cooler than estimates, with an annual increase of 3.3% matching forecasts. Overall PCE prices fell 0.1% on the month and rose 3.7% year over year, both in line with estimates. Because inflation cooled roughly as expected, futures found room to rally.
The Commerce Department's second-quarter GDP rose 1.5% versus 2.1% in the first quarter, missing the 2.3% estimate. The Labor Department's weekly initial jobless claims rose to 197,000 versus 187,000 the previous week, below the 205,000 expected.
Dow winners and laggards diverge
Inside the Dow industrials, Caterpillar jumped 3.5% and Nvidia rallied 2.2% in early morning action. Merck declined 2% and Walmart lost 1.1% in premarket trading.
Among exchange-traded funds, the Invesco QQQ climbed 1.7% as the SPDR S&P 500 rose 0.7% ahead of Thursday's opening bell, tracking the broader futures gains.
Source: Investor's Business Daily
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