U.S. stock index futures edged lower on Tuesday as investors weighed fresh inflation data and prepared for Nvidia's earnings report after the bell. The S&P 500 ended Monday little changed at 7,677.00, while the Dow Jones Industrial Average declined 0.2% to 53,464.59 and the Nasdaq Composite slipped 0.1% to 26,130.20.
The Bureau of Economic Analysis reported that the core Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.2% month-over-month in July and 3.3% year-over-year, matching expectations. The headline PCE index increased 0.2% MoM and 3.7% YoY, slightly above forecasts. Real GDP growth for the second quarter remained unrevised at 1.5%, in line with consensus estimates. Durable goods orders for July increased 1.1%, outpacing the 0.4% gain anticipated by economists.
Market pricing reflected growing caution ahead of the Federal Reserve's September policy meeting. According to the CME FedWatch tool, the probability of the Fed holding interest rates steady next month rose to nearly 64%, up from roughly 60% a day earlier.
Nvidia is expected to post quarterly revenue of about $92 billion, nearly double the prior quarter, as demand for its AI chips remains robust. Analysts are also monitoring potential shifts in customer orders from the company's Blackwell chips to its next-generation Vera Rubin processors. The outcome could influence broader semiconductor sector sentiment.
Earlier in the session, Brent crude futures fell 0.8% to $86.57 per barrel. The Philadelphia Semiconductor Index has declined more than 20% since the end of June, reflecting broader tech sector volatility. Walmart reported its weakest comparable sales growth in the U.S. in six years, signaling potential softening in consumer spending on goods despite continued strength in services such as travel.
Geopolitical developments added to market caution. Reports citing sources close to the Kremlin suggested Russia may escalate attacks on Ukrainian infrastructure, including potential conventional ballistic missile strikes on Kyiv. Some Russian officials were cited as contemplating the use of tactical nuclear weapons as a last resort, though no immediate action was indicated.
