Key facts
- Recent U.S. inflation data has eased pressure on the Federal Reserve to raise interest rates.
- Chicago Fed President Austan Goolsbee described recent inflation data as "a little better."
- Rising crude oil prices and geopolitical tensions in the Middle East are tempering market sentiment.
- The S&P 500 and Nasdaq are on track for their longest winning streak since early April.
- Applied Materials shares fell despite a positive revenue forecast.
- Reddit will join the S&P 500 index effective August 18.
U.S. stock index futures were subdued, following a record close for the S&P 500, as rising crude oil prices and geopolitical tensions tempered investor risk appetite. Cooling rate-hike expectations and resilient corporate earnings have put the S&P 500 and Nasdaq on track for a third consecutive week of gains.
Chicago Fed President Austan Goolsbee stated that recent U.S. inflation data has been "a little better," expressing hope for continued improvement. This sentiment, coupled with benign consumer inflation readings, has eased expectations for a September rate hike by the Federal Reserve. However, concerns about persistent energy costs, with Brent crude nearing $90 per barrel and U.S. retail gas prices above $4 per gallon, remain. The Cleveland Fed's inflation 'nowcaster' still projects PCE inflation above the Fed's 2% target for July and August.
Geopolitical developments, including increased U.S. economic pressure on Iran amid stalled ceasefire talks, contributed to higher crude prices and cautious market sentiment. Applied Materials shares fell 5.4% despite forecasting fourth-quarter revenue above Wall Street estimates. Reddit jumped 12.4% after being selected to join the S&P 500 index, effective August 18. Fox Corp's Class A shares gained 2.1% following an upgrade by J.P. Morgan. Shares of drone makers like Red Cat, Unusual Machines, and AeroVironment saw gains after President Donald Trump announced plans to impose tariffs on imported drones.
Megacap and growth stocks showed slight increases, with Nvidia and Alphabet up around 0.3% each. Later in the day, investors will look to U.S. retail sales data for July for further insight into consumer health. Comments from Atlanta Fed interim President Cheryl Venable are also anticipated.