Wall Street set for cautious open as investors eye U.S. inflation data
U.S. stock futures pointed to a subdued open on Wednesday as investors awaited producer price data, closely watching for signs that tariffs are feeding into inflationary pressures.
Markets turned cautious after U.S. consumer price figures for June revealed higher costs for some goods, prompting traders to scale back expectations of Federal Reserve rate cuts. Treasury yields rose on Tuesday, while Wall Street closed lower, News.Az reports, citing Reuters.
Adding to investor jitters, President Donald Trump signaled more tariff actions, saying letters notifying smaller countries of their U.S. tariff rates would go out soon. Over the weekend, Trump threatened to impose a 30% tariff on imports from Mexico and the European Union starting August 1.
At 1003 GMT, the MSCI World Equity Index (.MIWD00000PUS) was down 0.1%, pulling back from record highs. Europe’s STOXX 600 slipped 0.1%, while London’s FTSE 100 edged up 0.2% (.FTSE).
In the UK, consumer price inflation unexpectedly rose to its highest level in over a year, lifting the pound slightly against the dollar.
“The pass-through from tariffs into inflation is likely to come, but timing and extent remain uncertain,” said Vas Gkionakis, senior economist at Aviva Investors.
The Fed has held interest rates steady as it assesses tariff impacts, with Chair Jerome Powell previously signaling inflationary effects could emerge this summer. Traders now expect the first rate cut in September, though Trump has criticized Powell for not acting sooner, sparking concerns about Fed independence.
The dollar index eased to 98.547 after hitting multi-week highs on Tuesday, while the euro gained 0.2% to $1.1615. Benchmark 10-year U.S. Treasury yields retreated to 4.4753%, and Germany’s Bund yield was steady at 2.707%.
Oil prices dipped, with Brent crude at around $68.50 a barrel, as optimism about Chinese demand was offset by broader economic concerns. Gold rose 0.5% to $3,338.75 an ounce.
Investors are also bracing for U.S. bank earnings, with Goldman Sachs, Morgan Stanley, and Bank of America set to report later today.
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