US stock futures rise as investors wait for key inflation data, after tech stocks miss earnings targets

  • US stock futures rose Wednesday as investors waited for the key July print of the US consumer price index.
  • The CPI data is expected to show a drop in headline inflation, but the core reading may be more closely watched.
  • Coinbase and Roblox missed earnings targets after-hours, prompting investors to fret about tech stocks.

US stock futures rose Wednesday as investors braced for a US inflation report seen as key to the Federal Reserve’s data-dependent thinking on interest rate hikes.

But disappointing second-quarter financial results from Coinbase Global and Roblox overnight were underscoring worries about tech stocks and the economy as the earnings season winds down.

US futures were moving higher Wednesday, setting up for a comeback from losses in the prior session, when the S&P 500 logged its fourth straight decline. S&P 500 futures were up 0.24%, and Dow futures added 0.19%, while Nasdaq futures climbed 0.36%.

Investors are anxiously bracing for the release of the July consumer price index data due later, to help gauge the likely direction of the Fed’s monetary policy for the rest of 2022. At the moment, markets are increasingly pricing in a third straight 75 basis point rate hike at the central bank’s September meeting.

“All eyes will be on US inflation data released later today, as this could have a major influence on the direction of the stock market. A higher-than-expected figure could weigh on equities, as investors have simply had enough of the rising cost of living,” AJ Bell strategist Danni Hewson said.

The debate is focused on whether inflation has peaked or is becoming entrenched at high levels. If headine inflation has eased after hitting 9.1% in June, the Fed could take a more dovish approach to hikes, which would boost stocks.

“Economists are predicting an easing from the 9.1% figure seen in June, to 8.7% for July, though that’s unlikely to sway the Federal Reserve from its current course of monetary tightening,” Hargreaves Lansdown equity analyst Matt Britzman said. 

But the reading on core inflation — which strips out food and energy prices — will be closely watched, given analysts expect the headline measure to be cooled by lower commodity prices.

“Stubbornly high core inflation should support the Federal Reserve’s position that its work is far from done,” ING strategist Chris Turner said.

On US markets, shares of Roblox slid 13.5% premarket after the crypto-focused gaming company’s second-quarter earnings missed analyst targets and bookings — a key sales indicator — declined.

Also reporting after-hours, crypto exchange Coinbase undershot estimates with a quarterly loss of $1.09 billion. Its shares dropped 7.2% in premarket.

The earnings misses come after revenue warnings from and sell-offs for chipmakers Micron and Nvidia, which has raised concerns about the health of the sector and what it means for the US economy.

Analysts expect media and leisure giant Walt Disney to deliver a strong quarterly earnings report after the close Wednesday. They have been cheered by competitor Comcast‘s recent financial results, which showed revenue from its Universal theme park business soared 65%.

Ahead of the inflation data, Europe’s flagship Stoxx 600 stock index ticked 0.06% higher, with Paris’ CAC 40 and London’s FTSE 100 also broadly unchanged. Frankfurt’s DAX 40 added 0.15%. 

In Asia, Hong Kong’s Hang Seng plunged 1.96% as Chinese-listed tech stocks sold off, while the Shanghai Composite slipped 0.54%. Tokyo’s Nikkei 225 closed 0.65% lower.

Here’s how other major asset classes are performing:

  • Oil futures fell, with Brent crude down 0.90% to $95.44 a barrel, and WTI crude 0.85% lower at $89.72 a barrel.
  • The US dollar index dropped 0.18% to 106.18 ahead of the July CPI report.
  • Cryptocurrencies slipped, with bitcoin down 2.76% in the last 24 hours to $23,084, according to CoinMarketCap data. Ethereum slid 3.64% to $1,701.

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