US Stock Futures Stabilise Amid Soft Inflation Data and Ongoing Iran Tensions

U.S. equity index futures showed modest gains on Wednesday evening, with the S&P 500 Futures rising 0.1% to 7,622.5 points, the Nasdaq 100 Futures climbing 0.1% to 29,721.75 points, and Dow Jones Futures edging up 0.1% to 52,939.0 points as of 20:06 ET (00:06 GMT). The modest advance followed a positive Wall Street session buoyed by a suite of strong second‑quarter earnings, even as investors remained wary of geopolitical risks and elevated valuations in the artificial‑intelligence‑driven chip sector.

Inflation Data Relieves Rate‑Hike Concerns

June producer‑price‑index (PPI) figures came in softer than forecast, and the consumer‑price‑index (CPI) released a day earlier showed a similar easing trend. These softer prints mitigated market fears of an energy‑driven inflation spike that could have forced the Federal Reserve to raise rates as early as July. In a two‑day congressional testimony, Fed Chair Kevin Warsh reiterated the Fed’s commitment to a 2% inflation target but offered no specific roadmap for achieving it. Consequently, traders reduced their bets on an imminent rate hike, as reflected in CME’s FedWatch tool, although lingering concerns about AI‑induced price pressures kept long‑term inflation expectations from fully stabilising.

Chip Sector Drag and Earnings Landscape

Despite robust earnings from ASML Holding NV, the Dutch lithography equipment leader, chip‑related stocks continued to weigh on the market. The Philadelphia Semiconductor Index (SOX) fell more than 2%, signalling investor profit‑taking after a period of AI‑fuelled valuation surges. Attention now shifts to Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, which is slated to report its second‑quarter results on Thursday. Analysts anticipate another strong quarter but will scrutinise the company’s forward‑looking guidance for signs of demand sustainability.

Other major earnings slated for Thursday include UnitedHealth Group, GE Aerospace, Netflix, and Abbott Laboratories, adding further focus to the broader earnings calendar.

Geopolitical Tensions and Oil Prices

The United States and Iran continued to exchange strikes on Wednesday, with both sides presenting conflicting positions regarding navigation of the Strait of Hormuz. Oil prices remained elevated after a sharp rebound from annual lows observed over the previous week, reflecting the market’s sensitivity to the ongoing geopolitical friction.

---