Nasdaq Futures Rise 0.6% Ahead of July CPI Report
AI infrastructure earnings underpin early gains; inflation print lands at 8:30 a.m. ET
Photo by Daniel Lloyd Blunk-Fernández on Unsplash
Nasdaq 100 futures gained roughly 190 points as traders awaited the July CPI report, which could reset Fed expectations for September.
Futures Tick Higher Into the Print
Nasdaq 100 futures rose roughly 0.6%, adding about 190 points in premarket trade Wednesday. S&P 500 futures gained 0.2%. Dow futures were flat.
The Bureau of Labor Statistics releases the Consumer Price Index for July at 8:30 a.m. ET. June CPI rose 3.5% year over year, with core inflation, which excludes food and energy, up 2.6% over the same period. Traders are watching whether July shows acceleration or further cooling.
The print arrives at a delicate moment for Fed policy. Oil prices surged roughly 21% in July after disruptions in the Middle East rattled energy markets. That spike complicates the inflation picture and raises the stakes for today's reading.
The Fed Calculus
Fed Chair Kevin Warsh has signaled sensitivity to incoming data. A hotter reading could push odds of a September rate hike sharply higher at the FOMC's September 15-16 meeting. Inflation swaps imply 2.4% average inflation over the long run, still above the Fed's 2% target. Treasury yields at the long end hover near 20-year highs.
The July CPI is the first of three inflation reports before the Fed meets next month. Producer prices and the personal consumption expenditures index follow later in August. If all three run hot, the case for tighter policy strengthens.
Markets have grown accustomed to benign prints in recent months. February CPI held at a 2.4% annual rate, and core came in at 2.5% year over year. July poses a different test, given the energy shock. Traders parsing the data will focus on whether oil's rally bled into broader categories or remained contained.
AI Earnings Underpin Risk Appetite
The Nasdaq's early strength owes something to recent earnings from companies tied to artificial intelligence infrastructure. Microsoft and Amazon delivered strong results last week, reinforcing the narrative that heavy AI spending is translating into revenue.
Palantir Technologies jumped 17.2% in premarket trading earlier this month after raising its annual revenue forecast again. On Semiconductor added 7.5% after forecasting quarterly revenue above expectations, citing surging demand for power management chips used in AI data centers.
Investors have been scrutinizing results from AI companies this earnings season for signs that their billion-dollar investments are yielding returns. The recent results have provided enough reassurance to keep risk appetite intact ahead of macro catalysts like today's CPI.
Earnings Season Beats Historical Norms
Second-quarter results have exceeded typical standards. Of the 304 companies in the S&P 500 that reported as of last Friday, 85.2% beat estimates. The long-term average sits at 67.5%.
FactSet projected second-quarter earnings growth at 47.4% on a blended basis. Without the contributions from Alphabet and Amazon, that figure drops to 28.8%. Analysts expect full-year 2026 growth at 29.1%.
The S&P 500's forward price-to-earnings ratio stands at 19.6, just under its five-year average of 19.9. Valuations remain stretched but not at extremes. Strong earnings have done enough to justify current prices, but a hawkish shift from the Fed would test that thesis.
Oil and Geopolitics Add Uncertainty
Energy markets remain volatile. Brent crude has hovered around $80 after a steep rally in July. U.S.-Iran negotiations remain stalled, maintaining the risk of additional shocks.
The Fed has attributed persistent inflation in part to energy disruptions. If today's CPI shows that gasoline prices pushed headline inflation higher, the market will parse whether the effect is transitory or signals broader price pressures.
Core CPI will command more attention than headline for precisely this reason. A firm core reading would suggest inflation is sticky beyond commodities, giving the Fed less room to dismiss the print as noise.
What to Watch Next
The CPI drops at 8:30 a.m. ET. Consensus expects a modest monthly gain, but the July oil surge makes this print harder to forecast. A reading above expectations would likely send Treasury yields higher and pressure equity futures.
The options market on SPY and QQQ shows elevated implied volatility around the release, pricing a larger-than-average move. The [Options Heatmap](/optionsheatmap) on StreetAlpha reveals gamma concentrated near current levels, which could amplify moves in either direction once the number lands.
The next key dates: August PPI on the 13th, PCE on the 29th, and the FOMC decision on September 16. Today's print is the opening act, not the final word.
For informational purposes only. Not investment advice. Published Wednesday, August 12, 2026.