U.S. equity futures are modestly higher as investors digest benign July CPI and await another inflation test from producer prices. At roughly 5:50 a.m. ET, S&P 500 futures, Nasdaq futures and Dow futures were each up about 0.1%. The Russell 2000 gained 0.6% Wednesday, continuing to benefit from lower near-term Fed-hike expectations. The setup remains constructive but restrained, with AI infrastructure strength offset by a firmer dollar and continued uncertainty around Iran and the Strait of Hormuz.
U.S. equities finished mostly higher Wednesday. The S&P 500 gained 0.26%, the Nasdaq advanced 0.54%, the Russell 2000 rose 0.60% and the Dow slipped 0.04%. CoreWeave, Super Micro Computer and other AI-infrastructure names drove the growth trade, while the Philadelphia Semiconductor Index gained about 2.5%. Trading remained relatively light at 15.5 billion shares, versus a 20-session average of 17.5 billion.
Treasury markets were relatively stable following CPI. The 2-year yield fell 2 basis points to 4.20%, the 10-year was unchanged at 4.69% and the 30-year increased 1 basis point to 5.25%. Yields are edging lower this morning as traders increase the probability that the Fed holds rates unchanged in September; Reuters puts the current implied probability of a hold near 65%.
The DXY rose to 100.02 Wednesday, while the euro slipped to $1.1524, sterling eased to $1.3493 and the dollar strengthened to ¥159.49. The dollar is firmer again this morning and near a two-week high, even as lower U.S. rate expectations are being offset by geopolitical demand and shifting expectations for Japanese monetary policy.
September WTI crude fell 0.41% Wednesday to $82.86, while December gold gained 0.69% to $4,471.70. Crude is lower this morning, with WTI near $81.65 and Brent around $87.32, after U.S. crude inventories jumped 17.4 million barrels, their largest weekly increase since January 2023, and OPEC lowered its 2026 demand-growth forecast. Gold was down roughly 0.7% near $4,376 as the firmer dollar offset some safe-haven demand.
Wednesday’s July CPI report was broadly market-friendly. Headline prices increased 0.1% month over month and 3.4% year over year, down from 3.5% in June. Core CPI increased 0.2% for the month and 2.5% year over year. The result reduced pressure on the Fed to tighten again immediately, particularly following July’s weak payroll report.
Today’s focus shifts to July PPI and weekly jobless claims at 8:30 a.m. ET. Markets will watch producer-price components that feed into the Fed’s preferred PCE inflation measure; core PPI is expected to rise about 0.3% month over month, versus 0.2% in June. A 30-year Treasury auction later today also matters with the long bond still yielding above 5%.
Sector Highlights
Sector performance showed a mix of rate-sensitive and Technology leadership. Real Estate led with a 1.07% gain, followed by Technology +1.06%, Utilities +0.53% and Consumer Staples +0.47%. Health Care, Energy, Financials and Industrials also finished modestly higher. The main laggards were Consumer Discretionary -1.40%, Materials -1.19% and Communication Services -0.94%. Breadth was constructive, with advancers leading 1.21:1 on the NYSE and 1.40:1 on the Nasdaq.
Information Technology
- Cisco Systems (CSCO -4% after hours) forecast fiscal 2027 revenue of $72.2–$73.4 billion, well above the $68.69 billion consensus, with hyperscaler AI-infrastructure orders reaching $9.3 billion in fiscal 2026. The stock nevertheless declined as investors focused on a slightly softer gross-margin outlook and an already elevated earnings bar.
- CoreWeave (CRWV +19%), Super Micro Computer (SMCI +19%), Nebius (NBIS +34%) and Lumentum (LITE +13.6%) led Wednesday’s AI-infrastructure rally after strong earnings and guidance reinforced demand for compute, servers and optical networking.
- Nvidia (NVDA +3.0%) and Micron Technology (MU +4.9%) participated in the rebound, helping lift the semiconductor index 2.5%.
- Applied Materials (AMAT) reports after the close. Orders, advanced-node equipment demand, China exposure and AI-related fab spending will be the primary focus.
Consumer Discretionary
- Cava Group (CAVA +14.2%) rallied Wednesday after second-quarter sales and adjusted earnings exceeded expectations, providing a positive read-through for restaurant traffic and discretionary spending.
- Tapestry (TPR) reports before the open. Consensus is looking for roughly $1.9 billion of revenue and EPS near $1.25–$1.30, with Coach demand, margins and the outlook for accessible luxury spending in focus.
Industrials
- Deere (DE) reports before the open. Investors will focus on whether weakness in large agricultural equipment is stabilizing and whether construction-equipment demand continues to benefit from data-center and infrastructure investment. Deere maintained its $4.5–$5.0 billion full-year profit target last quarter despite continued pressure in large farm equipment.
Communication Services
- StubHub was down more than 13% premarket after stronger World Cup-related revenue failed to translate into profitability as expenses increased.
