U.S. stock futures advance ahead of crucial inflation report

The S&P 500 has declined six of the last seven sessions.

What’s driving markets

The consumer price index for July is slated for release at 8:30 a.m. Eastern, where economists polled by the Wall Street Journal expect 0.2% monthly gains for both the headline and the core, which would mean the headline year-over-year rate of inflation would actually increase, but the core would slip to 4.7% from 4.8%.

“We see a continued disinflation in goods, and slowing shelter and broader services momentum, but at a slower pace than witnessed in the first half of 2023,” said Andrew Patterson, senior international economist at Vanguard. “Although underlying inflation data suggests a decelerating trend, we maintain reservations about a seamless path towards 2% inflation by next year.”

With about 90% of second-quarter earnings from S&P 500 companies now published, the percent beating on earnings has improved from the previous quarter, but fewer are beating on sales, said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.

“Reporting season has been fine in our view but not good enough to fend off a bit of choppiness in the equity market,” she said. “While the conversation around outlooks has seemed a bit thin, the outlook commentary has generally been fine with most of those who have commented highlighting resiliency, strength despite headwinds, normalization, and ongoing uncertainty.”

The upside of earnings season being largely done is companies are now free to resume their stock buyback programs.