NASDAQ 100, Dow Jones, S&P 500: Futures Rise; Inflation Data in Focus

Highlights

• US stock index futures edge higher after S&P 500 hits yearly high.
• Disney extends CEO’s contract, causing shares to rise.
• Stock market experiences surge after milder-than-expected June inflation report.

Overview

The major US stock index futures contracts are edging higher in overnight trading following a strong performance by the S&P 500, which closed at its highest level in over a year. In addition to this positive momentum, market participants are eagerly awaiting another key inflation reading later in the session.

At 08:47 GMT, the blue chip Dow futures contract is trading 34628.00, up 78.00 or +0.23%. The benchmark S&P 500 Index is at 4522.00, up 14.50 or +0.32% and the tech-weighted Nasdaq Composite is trading 15534.25, up 89.50 or +0.58%.

Disney Extends CEO’s Contract, Shares Rise

Disney shares saw a modest increase of nearly 1% during extended trading after the company announced the extension of CEO Bob Iger’s contract through 2026, two years longer than originally planned. This decision comes as a surprise, as earlier this year, Iger stated that he had no intention of staying on beyond two years. Iger rejoined Disney as CEO last year, taking over from Bob Chapek, whose departure was abrupt, and his original contract was set to end in 2024.

June Inflation Report Boosts Stock Market

On Wednesday, stocks experienced a surge after the release of a June consumer price index report that revealed milder inflation than expected. This alleviated concerns that the Federal Reserve’s efforts to tackle persistent inflation could push the economy into a recession. As a result, the S&P 500 and Nasdaq Composite climbed 0.74% and 1.15% respectively, reaching their highest closing levels since April 2022. The Dow Jones Industrial Average also rose by 86.01 points, or 0.25%.

Market Shows Signs of Soft Landing Scenario

These recent developments, including the CPI data, expectations of easing, and overall stock market activity, suggest a market that is resembling a soft landing scenario, a situation many deemed unattainable at the beginning of 2023. It is becoming increasingly necessary for the Federal Reserve to acknowledge the breakdown in inflationary pressures. Consequently, they may adjust their approach of maintaining higher interest rates for an extended period. Or the market may begin to factor in this possibility, although it is not guaranteed.

Focus Shifts to Producer Price Index and Central Bank’s Next Moves

Looking ahead, investor attention will now turn to the producer price index, another significant inflation gauge that will be released on Thursday. The outcome of this report could heavily influence the likelihood of future central bank interest rate hikes and provide insights into the future path of inflation.

US Treasury Yields Dip on Cooler Inflation Data

In response to the June inflation print, U.S. Treasury yields mostly declined on Thursday, as the cooler-than-expected data reduced the chances of more aggressive interest rate hikes by the Federal Reserve.

Earnings Season Continues with Key Reports

Furthermore, the second-quarter earnings season continues, with PepsiCo, Delta Air Lines, and Fastenal set to report their results before the market opens.

Short-Term Outlook:  Strengthening

Overall, with the market displaying strength, inflation readings influencing future decisions, and key earnings reports on the horizon, traders and investors are eagerly watching these developments as they navigate the ever-changing financial landscape.