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Happy Wednesday. Stock futures were mixed as investors prepared for the release of a key inflation report and Nvidia’s (NVDA) quarterly results.
July’s personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, is set to be released today at 8:30 a.m. ET.
Economists polled by Dow Jones expect a month-over-month increase of 0.1% and a year-over-year increase of 3.6%. In June, the index fell 0.1% month over month and rose 3.7% year over year.
“After softer CPI and recent weakness in employment, another moderation in inflation would strengthen the argument that the Fed can remain on hold rather than tighten again,” said Daniela Hathorn, senior market analyst at Capital.com. “A hotter print would be more disruptive, potentially pushing yields and the dollar higher just as equities are trading close to record levels.”
Hathorn said the data also set the stage for Kevin Warsh’s Jackson Hole remarks on Friday, when markets will be looking for greater clarity on how the new Fed Chair intends to balance persistent inflation against softer growth.
Nvidia’s earnings report, Hathorn said, “is arguably bigger than a single-company earnings report given Nvidia’s role as a barometer for the entire AI investment cycle.”
“Investors will be looking beyond headline revenue and earnings towards data-center demand, margins, next-generation chip supply and, crucially, whether hyperscaler spending remains strong enough to justify the extraordinary amounts of capital flowing into AI infrastructure,” she said.
“Expectations are extremely high, meaning even another strong quarter may need equally convincing guidance to sustain the rally.”
Stocks closed higher on Tuesday, driven by a rebound in technology stocks.
