Traders work on the floor of the New York Stock Exchange, April 26, 2023.
Michael M. Santiago | Getty Images
Stock futures climbed Thursday morning as traders prepared for the August producer price index, a measure of wholesale inflation.
Futures tied to the Dow Jones Industrial Average added 47 points or 0.15%. S&P 500 futures ticked up 0.23%, while Nasdaq 100 futures inched 0.38% higher.
During Wednesday’s regular trading, the 30-stock Dow stumbled for a second consecutive day, dropping 0.2%, dragged down by 3M. The Nasdaq Composite closed higher by nearly 0.3%, while the S&P 500 added 0.1%.
The August reading of the consumer price index was a key event for traders. The core CPI, which excludes food and energy, gained 0.3% from the prior month and 4.3% from 12 months earlier. That compares against estimates of 0.2% and 4.3%, respectively, according to economists polled by Dow Jones. Headline inflation, meanwhile, increased 0.6% on a monthly basis and 3.7% from the prior year, while economists had called for 0.6% and 3.6%.
The August CPI reading isn’t expected to change the Federal Reserve’s course at its policy meeting beginning Sept. 19. Fed funds futures pricing data from Wednesday shows a 97% likelihood of rates remaining unchanged next week, according to the CME FedWatch Tool.
Even if the central bank holds steady on rates this time, markets will likely continue to be volatile in the coming months. Indeed, fed funds futures pricing data shows a roughly 48% probability that rates will rise at the November meeting.
“We believe volatility will be with us through year-end as the risk-on assets that dragged the market higher through 2023 will begin to look expensive in the face of elevated yields,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth.
Another inflation metric looms ahead Thursday: the August reading of the producer price index. It is expected to have risen 0.4%, per economists polled by Dow Jones. In July, wholesale prices climbed 0.3%, surpassing expectations. Retail sales are also due before the open.
In the world of earnings, Adobe is expected to post quarterly results after the market close Thursday.
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