A softer-than-expected June inflation print pushed S&P 500 futures into positive territory on Tuesday, fueling bets on a less hawkish Federal Reserve. Contracts on the S&P 500 rose while Nasdaq 100 futures led the advance.
S&P 500 futures turned positive on Tuesday after a softer-than-expected inflation reading fueled bets on a less hawkish Federal Reserve. The reversal came straight off the June Consumer Price Index, which undershot what economists had penciled in.
Inflation cools more than forecast
A Labor Department report showed the Consumer Price Index rose 3.5% on a yearly basis, less than the 3.8% increase estimated by economists polled by Reuters. On a monthly basis, it fell 0.4% versus an expected 0.1% decrease.
The core reading told the same story. Excluding volatile food and energy components, core CPI stood at 2.6% on an annual basis, below estimates of a 2.8% increase. Core CPI was unchanged on a month-on-month basis, against a 0.2% expected rise.
Nasdaq leads the futures move
The equity response split across the major benchmarks. At 8:33 a.m. ET, Dow E-minis were down 6 points, or 0.01%, while S&P 500 E-minis were up 35.5 points, or 0.48%, and Nasdaq 100 E-minis were up 407.5 points, or 1.38%.
The Nasdaq's outperformance drew support from beyond the inflation data. Bloomberg reported that Nasdaq 100 futures climbed 1% following a recovery in South Korea's memory giants, with gains from SK hynix and Samsung Electronics helping lift peers in the US. Investors were also weighing remarks from Federal Reserve Chairman Kevin Warsh alongside the fresh price data.
Sources: Investing.com, Bloomberg.com (snippet-based)
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