US stock futures slip after July inflation data

U.S. stock index futures edged lower on Wednesday after data showed consumer prices rose less than forecast in July, tempering expectations for aggressive Federal Reserve interest-rate cuts.

Dow Jones Industrial Average futures were down 0.2%, while S&P 500 and Nasdaq 100 futures each fell 0.3%. The declines followed the release of the Labor Department’s consumer price index (CPI), which increased 0.2% month-over-month in July, below the 0.3% consensus estimate. The annual inflation rate slowed to 3.2% from 3.3% in June, matching expectations.

The softer inflation print reduced bets on a September rate cut by the Federal Reserve, with traders now pricing in a roughly 70% chance of a 25-basis-point reduction, down from about 80% prior to the data, according to CME Group’s FedWatch tool. Treasury yields rose modestly as investors reassessed the timing of monetary easing.

Tech-heavy Nasdaq futures lagged as higher yields weighed on growth stocks, while cyclical sectors such as energy and financials showed relative resilience. The dollar index held near session lows, having pared earlier gains after the CPI release.

Market focus now shifts to retail sales data due later on Wednesday, which could provide further clarity on consumer spending trends amid shifting inflation dynamics.