Futures Show Notable Move To The Upside Following Inflation Data

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to see initial strength after ending yesterday's choppy trading session moderately lower.

The futures showed a notable move to the upside following the release of the Labor Department's closely watched report on consumer price inflation in the month of July.

The Labor Department said its consumer price index rose by 0.2 percent in July after climbing by 0.3 percent in June. The modest increase matched expectations.

The annual rate of growth by consumer prices in July was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to tick up to 2.8 percent.

The report also said the core consumer price index, which excludes food and energy prices, climbed by 0.3 percent in July after rising by 0.2 percent in June. The increase by core prices was also in line with estimates.

Meanwhile, the annual rate of growth by core consumer prices accelerated to 3.1 percent in July from 2.9 percent in June. Economists had expected the pace of growth to inch up to 3.0 percent.

Despite the faster than expected annual core price growth, traders seem to believe the data increases the chances the Federal Reserve will lower interest rates next month.

Following the release of the report, CME Group's FedWatch Tool is indicating a 90.1 percent chance the Fed will cut rates by a quarter point in September.

Following the strong upward move seen in the previous week, stocks showed a lack of direction over the course of the trading session on Monday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day in negative territory. While the Dow slid 200.52 points or 0.5 percent to 43,975.09, the Nasdaq fell 64.62 points or 0.3 percent to 21,385.40 and the S&P 500 dipped 16.00 points or 0.3 percent to 6,373.45.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of several closely watched economic reports in the coming days.

The Labor Department's report on consumer price inflation in the month of July is likely to be in focus on Tuesday, as the data could impact the outlook for interest rates.

Reports on producer price inflation, retail sales and industrial production are also likely to attract attention in the coming days.

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Oil service stocks showed a significant move to the downside, however, with the Philadelphia Oil Service Index slumped 2.1 percent despite an increase by the price of crude oil.

Oil producer and transportation stocks also saw notable weakness on the day, contributing to the moderately lower close by the broader markets.

Commodity, Currency Markets

Crude oil futures are falling $0.41 to $63.55 a barrel after climbing $0.52 to $63.96 a barrel on Monday. Meanwhile, after plummeting $86.60 to $3,404.70 an ounce in the previous session, gold futures are edging down $3.90 to $3,400.80 an ounce.

On the currency front, the U.S. dollar is trading at 148.02 yen compared to the 148.15 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1650 compared to yesterday's $1.1615.

Asia

Asian stocks turned in a mixed performance on Tuesday, with Japanese markets outperforming on tariff and earnings optimism.

A cautious undertone prevailed elsewhere across the region ahead of key U.S. inflation data due later in the day that might shape the Federal Reserve's interest rate path.

The report may show a slight pickup in inflation as companies pass higher import taxes on a variety of items on to consumers.

Gold edged up slightly, the dollar held gains and oil prices were modestly higher after U.S. President Donald Trump downplayed expectations for his upcoming meeting with Russian leader Vladimir Putin, saying it is a "feel-out meeting" and he would confer with Ukrainian and European leaders after the sit-down.

China's Shanghai Composite Index rose half a percent to 3,665.92 as the United States and China confirmed a 90-day extension of their trade truce, as expected. This keeps tariffs steady until November.

Shares of Chinese chipmakers surged on signs that China is seeking to strengthen its domestic semiconductor industry.

Bloomberg reported that Beijing has urged domestic firms to avoid using Nvidia's H20 processors in sensitive projects, particularly for government or national security work, potentially boosting demand for local alternatives.

Hong Kong's Hang Seng Index rose 0.3 percent to 24,969.68 ahead of first-half earnings results from prominent index constituents due this week.

Japanese stocks rallied as concerns over tariff levels eased, boosting optimism over trade with the United States.

The Nikkei 225 Index jumped 2.2 percent to 42,718.17, the highest closing ever, as traders returned to their desks after a holiday on Monday. The broader Topix Index closed up 1.4 percent at 3,066.37.

Tech stocks surged, with heavyweight SoftBank Group spiking nearly 7 percent to a record high following reports that the company has selected four banks to help it prepare for a U.S. listing of its payments app operator PayPay.

Advantest shot up 6.3 percent, Lasertec soared 7.1 percent and Tokyo Electron added 1.1 percent.

Seoul stocks ended lower for a third straight session as investors waited for the outcome of consultations between the government and the ruling party on scrapping earlier plans to tighten capital gains tax rules. The Kospi dropped 0.5 percent to 3,189.91, with energy, shipbuilding and entertainment shares pacing the declines.

Australian markets eked out modest gains as the Reserve Bank of Australia slashed its key interest rate for a third time this year and signaled future policy decisions will hinge on incoming data.

The benchmark S&P/ASX 200 Index rose 0.4 percent to 8,880.80, while the broader All Ordinaries index settled 0.4 percent higher at 9,150.30.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index tumbled 1.2 percent to close at 12,759.68, making its biggest single-day drop since late May.

Europe

European stocks are turning in another mixed performance on Tuesday as the U.S. extended its pause on higher tariffs for Chinese goods until November 10, averting an immediate escalation in the trade war.

While the German DAX Index is down by 0.4 percent, the U.K.'s FTSE 100 Index is just above the unchanged line and the French CAC 40 Index is up by 0.3 percent.

The British pound gained against the euro and dollar after the release of labor market data, with payrolls falling for a sixth month and vacancies dropping further, while wage growth stayed strong.

A separate set of data revealed that retail sales in the U.K. rose by 2.5 percent year on year in July.

German IT services company Cancom SE fell 2.6 percent after it slipped to loss in the second quarter from profit a year ago.

Valneva soared 8.2 percent in Paris as the specialty vaccine firm announced a 37.8 percent increase in revenue for the first six months of the year.

Reinsurer Hannover Re declined 1.3 percent despite reporting higher net income and reinsurance revenue in the first half of the year.

Swiss generics and biosimilar specialist Sandoz rose over 1 percent after partnering with Elawan Energy for 150MW solar projects in Spain.

Spirax Group shares surged 13 percent. The British industrial thermal energy and fluid technology company posted first-half 2025 earnings that beat expectations.

Property investor and developer Derwent London tumbled 4.2 percent after announcing the retirement of Executive Director Nigel George.

Recruiter Page Group declined 1.3 percent on reporting a 99 percent fall in first-half pre-tax profit against the backdrop of persistent macroeconomic uncertainty and tariff concerns.

Ladbrokes owner Entain fell nearly 3 percent despite reporting strong first-half results and lifting its full-year expectations.

U.S. Economic News

Consumer prices in the U.S. increased in line with economist estimates in the month of July, according to a report released by the Labor Department on Tuesday.

The Labor Department said its consumer price index rose by 0.2 percent in July after climbing by 0.3 percent in June. The modest increase matched expectations.

The annual rate of growth by consumer prices in July was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to tick up to 2.8 percent.

The report also said the core consumer price index, which excludes food and energy prices, climbed by 0.3 percent in July after rising by 0.2 percent in June. The increase by core prices was also in line with estimates.

Meanwhile, the annual rate of growth by core consumer prices accelerated to 3.1 percent in July from 2.9 percent in June. Economists had expected the pace of growth to inch up to 3.0 percent.

At 10 am ET, Richmond Federal Reserve President Thomas Barkin is scheduled to speak on "Why the Consumer Matters" before the Health Management Academy.

Kansas City Federal Reserve President Jeffrey Schmid is due to speak on monetary policy and the economic outlook before the Southern Economic Development Council Annual Conference at 10:30 am ET.