U.S. stock futures edged slightly lower during Asian trading on Wednesday as investors awaited key inflation data and Nvidia’s quarterly earnings, with both events expected to influence the outlook for interest rates and the technology sector.
S&P 500 futures slipped around 0.1% to 7,685.25 points, while Nasdaq 100 futures fell about 0.2% to 29,233 points. Dow Jones futures posted a marginal decline. Nasdaq 100 futures had dropped about 0.5% earlier in the session before recovering part of their losses.
Wall Street’s major indexes closed higher in the previous session, with both the Dow Jones and S&P 500 gaining around 0.3%, while the Nasdaq advanced 0.7%. Technology stocks led the gains, with Nvidia shares rising about 2.2% and AMD climbing around 4.9%.
Market attention is now focused on the July Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge. Economists expect headline inflation to slow to 3.6% on an annual basis from 3.7% in June, while core inflation is expected to remain unchanged at 3.3%.
The data has taken on greater importance following comments from Boston Federal Reserve President Susan Collins, who indicated that the central bank may need to raise interest rates soon if inflation does not continue to ease. Core inflation remains well above the Federal Reserve’s 2% target, leaving markets highly sensitive to any signs of renewed price pressures.
Nvidia is scheduled to report quarterly earnings after the market closes, providing another major test of investor enthusiasm for artificial intelligence and elevated technology stock valuations. Investors will focus closely on demand for artificial intelligence infrastructure and the company’s outlook amid concerns over the pace of spending linked to artificial intelligence.
The sharp decline in oil prices and lower U.S. Treasury yields helped support equity gains in the previous session. Brent crude extended its losses during Asian trading, falling below $87 per barrel and easing some concerns about inflation.
Meanwhile, U.S. Treasury yields moved higher during Asian trading after declining for several consecutive sessions. The 10 year Treasury yield rose to around 4.645%, while the 30 year yield climbed to approximately 5.18%. Yields had risen sharply during the previous week amid concerns over persistent inflation, increased government borrowing and heavier corporate debt issuance.
The U.S. Treasury’s decision to expand buybacks of longer maturity debt helped ease some pressure at the long end of the yield curve. However, investors remain cautious due to the large fiscal deficit and the substantial supply of government debt.
Investors are also looking ahead to remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium later this week for fresh signals on the outlook for monetary policy.
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