September S&P 500 E-Mini futures (ESU25) are up +0.6%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.7% this morning.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose by 0.2% in the last month, bringing the year-over-year increase to 2.7%. This was slightly lower than the Dow Jones estimate of 2.8%. When you take out the volatile food and energy sectors, the core CPI increased by 0.3% for the month and 3.1% over the past year. These figures matched analysts' expectations and are generally seen by Federal Reserve officials as a more reliable indicator of long-term inflation trends.
On Monday, U.S. President Donald Trump signed an executive order delaying hefty tariffs on Chinese imports through November 10th, stabilizing trade relations between the world’s two largest economies. China’s commerce ministry confirmed the move hours after Trump’s announcement, stating that the truce would be extended until mid-November. Still, some investors and analysts cautioned that the extension of the trade truce could prolong uncertainty and create a more persistent risk to inflation, complicating the outlook for Fed policymakers.
In yesterday’s trading session, Wall Street’s main stock indexes ended in the red. Monday.com (MNDY) plummeted over -29% after the software company issued weak Q3 revenue guidance. Also, C3.ai (AI) tumbled more than -25% after the AI software company posted downbeat preliminary FQ1 results. In addition, Adobe (ADBE) fell over -2% after Melius Research downgraded the stock to Sell from Hold with a $310 price target. On the bullish side, TKO Group Holdings (TKO) surged more than +10% and was the top percentage gainer on the S&P 500 after Paramount Skydance agreed to pay more than $7 billion to make the newly formed media giant the exclusive distributor of the UFC.
Meanwhile, President Trump named EJ Antoni, chief economist at the conservative Heritage Foundation, to lead the Bureau of Labor Statistics after firing the agency’s former head earlier this month.
Today, all eyes are focused on the U.S. consumer inflation report, which is set to be released in a couple of hours. The report will provide an opportunity to assess the impact of tariffs on inflation amid a cooling labor market. The recent U.S. ISM services PMI showed an unexpected increase in the prices paid sub-index, serving as a reminder that “inflation is still a force to be reckoned with,” according to Chris Beauchamp, chief market analyst at IG. Economists, on average, forecast that the U.S. July CPI will come in at +0.2% m/m and +2.8% y/y, compared to the previous numbers of +0.3% m/m and +2.7% y/y. Also, the U.S. core CPI is expected to be +0.3% m/m and +3.0% y/y in July, compared to the June figures of +0.2% m/m and +2.9% y/y.
A survey conducted by 22V Research revealed that only 18% of investors expect a “risk-on” market reaction to the CPI report, while 43% anticipate a “mixed” response and 39% foresee a “risk-off” reaction.
“The market’s reaction to any surprises in the numbers could be exaggerated — especially if a significantly hotter-than-expected CPI print leads traders to believe the Fed may not cut rates at its next meeting,” said Chris Larkin at E*Trade from Morgan Stanley.
U.S. rate futures have priced in an 84.5% probability of a 25 basis point rate cut and a 15.5% chance of no rate change at the September FOMC meeting.
Market participants will also parse comments today from Richmond Fed President Tom Barkin and Kansas City Fed President Jeff Schmid.
On the earnings front, notable companies like Sea Limited (SE), CoreWeave (CRWV), Cardinal Health (CAH), and Circle (CRCL) are scheduled to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.276%, down -0.21%.
The Euro Stoxx 50 Index is up +0.05% this morning as investors welcomed the extension of the U.S.-China trade truce. Energy and mining stocks outperformed on Tuesday. However, the benchmark index’s gains were limited amid caution ahead of key U.S. inflation data that could reshape expectations for Fed rate cuts. Investors also digested weak economic data from the region. Data from the Office for National Statistics released on Tuesday showed that the U.K. labor market continued to cool in the second quarter as businesses faced higher employment taxes, uncertainty over the trade outlook, and cautious consumer spending. Separately, the ZEW economic research institute reported that German investor morale fell more than expected in August amid frustration over the European Union’s trade deal with the U.S. Meanwhile, investors are awaiting Friday’s meeting between U.S. President Donald Trump and Russian President Vladimir Putin over the war in Ukraine. Trump said on Monday that both Kyiv and Moscow would need to cede territory to end the war. In corporate news, Spirax-Sarco Engineering Plc (SPX.LN) surged over +13% after the company reported better-than-expected first-half results. Also, Sartorius AG (SRT3.D.DX) climbed more than +3% after Jefferies upgraded the stock to Buy from Hold.
U.K. Average Earnings ex Bonus, U.K. Unemployment Rate, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.
U.K. Average Earnings ex Bonus stood at 5.0% in the three months to June, in line with expectations.
The U.K. Unemployment Rate was 4.7% in the three months to June, in line with expectations.
The German August ZEW Economic Sentiment Index came in at 34.7, weaker than expectations of 39.5.
The Eurozone August ZEW Economic Sentiment Index arrived at 25.1, weaker than expectations of 28.1.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.50%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.15%.
China’s Shanghai Composite Index closed higher today as the extension of the tariff truce between the U.S. and China boosted sentiment. U.S. President Donald Trump signed an executive order on Monday delaying hefty tariffs on Chinese imports through November 10th. China’s commerce ministry confirmed the move hours after Trump’s announcement, stating that the truce would be extended until mid-November. The extension gives the world’s two largest economies additional time to settle their trade dispute, providing relief to investors already buoyed by a string of other tariff-reducing agreements. Meanwhile, semiconductor stocks jumped on Tuesday after Bloomberg News reported that China had urged domestic companies to refrain from using Nvidia’s H20 processors, especially for government-related purposes. The report followed comments from Trump on Monday, indicating he might permit Nvidia to sell a scaled-down version of its next-generation advanced GPU chip in China. In corporate news, Huizhou Desay SV Automotive Co. rose over +7% after the automotive electronics producer posted strong first-half results. Investor focus this week is on a slew of China’s official data, including industrial production, retail sales, fixed asset investment, and unemployment figures, which will provide the most comprehensive view yet of the country’s economic momentum in July. Investors are also awaiting earnings reports from tech heavyweights later this week, including Tencent, Meituan, JD.com, and Alibaba.
Japan’s Nikkei 225 Stock Index closed sharply higher today, hitting an all-time high as relief over U.S. tariffs continued to fuel optimism about the country’s economic outlook. Technology stocks led the gains on Tuesday. Japanese markets, which reopened after Monday’s holiday closure, extended last week’s gains, fueled by easing concerns over the impact of U.S. tariffs on the nation’s economy. Japan’s top trade negotiator confirmed on Friday that U.S. officials said Washington would end stacking of universal tariffs on the country and proceed with cutting car levies as promised. Several Japanese companies have recently raised their earnings forecasts, noting that the impact of U.S. tariffs on their operations is expected to be less severe than previously anticipated. Sentiment also got a boost after U.S. President Donald Trump extended a pause of steep tariffs on Chinese goods for an additional 90 days. In addition, Japanese stocks are benefiting from gains in global markets, driven by growing expectations for Federal Reserve interest rate cuts. In corporate news, SoftBank Group climbed over +6% after Reuters reported that the conglomerate was choosing banks for a U.S. listing of its payments app operator, PayPay. Also, Kioxia Holdings surged more than +10% after the memory maker reported strong results. Investor focus this week is on Japan’s preliminary second-quarter GDP figures, following the Bank of Japan’s reiteration that growth is expected to moderate. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.16% to 24.66.
Pre-Market U.S. Stock Movers
Nvidia (NVDA) fell about -0.3% in pre-market trading after Bloomberg News reported that China had urged domestic companies to refrain from using the company’s H20 processors, especially for government-related purposes.
BigBear.ai (BBAI) tumbled over -28% in pre-market trading after the AI software provider posted downbeat Q2 results and cut its full-year revenue guidance.
Archer Aviation (ACHR) plunged more than -12% in pre-market trading after the developer of electric vertical takeoff and landing aircraft reported a wider-than-expected Q2 loss.
Intel (INTC) rose over +2% in pre-market trading after President Trump said late Monday he had a “very interesting” meeting with the company’s CEO Lip-Bu Tan, just a week after calling for the executive’s resignation.
Starbucks (SBUX) gained more than +1% in pre-market trading after Baird upgraded the stock to Outperform from Neutral with a price target of $115.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - August 12th
Sea (SE), CoreWeave (CRWV), Cardinal Health (CAH), Circle Internet (CRCL), CAVA Group (CAVA), CAE Inc. (CAE), Lumentum Holdings (LITE), H&R Block (HRB), Pony Ai (PONY), Rigetti Computing (RGTI), Madison Square Garden Sports (MSGS), eToro (ETOR), Everus Construction (ECG), Grupo Aval (AVAL), Intapp (INTA), IHS Holding (IHS), Slide Insurance Holdings (SLDE), Liquidia Technologies (LQDA), BKV (BKV), Grail (GRAL), Webtoon Entertainment (WBTN), Kindercare Learning (KLC), Navigator Holdings (NVGS), Anavex Life Sciences (AVXL), Mineralys Therapeutics (MLYS).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
