Dow futures climb; July inflation rises more slowly than expected

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Dow futures climb; July inflation rises more slowly than expected
Credit: © Reuters. -- U.S. stock futures retained a positive tone Thursday, after data showed that U.S. annual inflation accelerated by less than expected in July.

By 08:45 ET (12:45 GMT), the Dow futures contract was up 135 points, or 0.4%, S&P 500 futures traded 25 points, or 0.5% higher, and Nasdaq 100 futures climbed 135 points, or 0.9%.

Inflation rises more slowly than feared

Annual U.S. inflation accelerated by less than expected in July, with the headline consumer price index holding steady at 0.2% month-on-month, meeting estimates. Yearly , the reading increased by 3.2%, quickening from 3.0% in June. Economists had expected the figure to jump by 3.3%.

Meanwhile, core CPI , which strips out volatile items like food and energy, was also unchanged at 0.2% monthly. Year-on-year , the core figure rose by 4.7%, a slower rate than the projected uptick of 4.8%.

While these figures suggest that inflation remains sticky, they also point to a possible easing in price pressures and potentially bolster the case for the Federal Reserve to pull back from its long-standing cycle of interest rate increases.

The Federal Reserve next meets in September, and officials have said in recent days that they could be near a point where they could pause on further interest rate hikes.

Positive Disney results boost sentiment

This has added to the optimism generated by solid numbers from entertainment giant Walt Disney (NYSE: DIS ).

Walt Disney stock gained in premarket trading Thursday, boosting sentiment in the wider market, after the entertainment colossus announced plans to increase the prices of its streaming service and crack down on password sharing to help offset sputtering performance in its film and television divisions.

The streaming unit, which includes options like Disney+ and Hulu, narrowed its losses by more than anticipated in its fiscal third quarter following a bump up in subscription prices and marketing cost cuts.

Disney has also created a task force to study artificial intelligence and how it can be applied across the entertainment conglomerate, Reuters reported, citing three sources.

Earnings are also due from the likes of amusement park company Six Flags (NYSE: SIX ), donut chain Krispy Kreme (NASDAQ: DNUT ), and clothes maker Ralph Lauren (NYSE: RL ), while the tech sector is likely to be in focus after U.S. President Joe Biden unveiled a ban on some investments into Chinese tech companies, opening up the possibility of retaliation.

Crude drifts lower ahead of CPI release

Oil prices edged lower Thursday in a bout of profit taking, but remained near multi-month highs ahead of key U.S. inflation release.

U.S. crude inventories unexpectedly grew in the week to August 4, data from the Energy Information Administration showed Wednesday. However, there was also a much bigger-than-expected draw in gasoline and distillate stockpiles, suggesting U.S. fuel demand remained robust.

Oil prices have been boosted in recent days by extensions to output cuts by Saudi Arabia and Russia, exacerbating supply tightness.

By 08:45 ET, the U.S. crude futures traded 0.4% lower at $84.03 a barrel, while the Brent contract dropped 0.2% to $87.34. Brent hit a six-month high on Wednesday, while WTI touched its strongest level since November 2022.

Additionally, gold futures rose 0.4% to $1,957.75/oz, while EUR/USD traded 0.6% higher at 1.1039.

(Oliver Gray contributed to this item.)


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