U.S. stock index futures slipped on Wednesday as investors weighed stronger-than-expected inflation data against steady economic growth, with traders parsing the implications for Federal Reserve policy.
The Commerce Department’s Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, rose 0.2% in July from the prior month, exceeding the 0.1% increase forecast by Reuters-polling economists. On an annual basis, the PCE index climbed 3.7%, above the 3.6% consensus estimate. Core PCE, which excludes food and energy, increased 0.2% monthly and 3.3% year-over-year, matching expectations.
U.S. GDP growth for the second quarter was reported at 1.5%, in line with estimates, signaling a modest expansion of the world’s largest economy. The data release prompted mixed reactions in pre-market trading, with Dow Jones Industrial Average E-mini futures up 20 points, or 0.04%, while S&P 500 E-mini futures fell 8.75 points, or 0.11%. Nasdaq 100 E-mini futures dropped 103.25 points, or 0.35%, reflecting higher sensitivity to rate-sensitive sectors.
The inflation figures complicate the Fed’s policy path, with markets now adjusting expectations for future rate decisions amid persistent price pressures. Traders will monitor subsequent economic releases and Fed communications for further clarity on the central bank’s stance.
