Pre-Market Positioning Ahead of the Two Catalysts
U.S. stock futures traded flat on the morning of August 26 as investors positioned for two closely watched events: the release of July's personal consumption expenditures price index and Nvidia's second-quarter earnings report, scheduled after the close. S&P 500 futures edged down 0.1% and Nasdaq-100 futures slipped 0.2%, while Dow Jones Industrial Average futures were up 6 points, equivalent to a 0.01% gain. Tuesday's session had extended the Dow's winning streak to three straight sessions, with the index rising 160.24 points, or 0.3%. Both the S&P 500 (+0.3%) and the Nasdaq Composite (+0.7%) closed higher on Tuesday, each supported by retreating bond yields and weaker oil prices.
PCE Inflation Reading and Its Macro Stakes
The PCE price index, the Federal Reserve's preferred inflation gauge, was set for release at 8:30 a.m. ET. Economists expected a 0.1% month-over-month increase and a 3.6% year-over-year rise for July, which would represent a slight improvement from June's 3.7% annual reading and 0.1% monthly decline. The inflation print arrived with bond markets in focus; the 10-year Treasury yield gave back nearly 8 basis points on Tuesday, partially reversing the climb that had pushed the 30-year rate to its highest mark in close to two decades the prior week.
Nvidia's Earnings Setup and Market Cap Context
Nvidia was set to report alongside Salesforce and CrowdStrike after the closing bell. Analysts polled by FactSet, as compiled by CNBC, forecast Nvidia would post earnings of $2.09 per share on revenue of $92.28 billion. The company's market valuation has crossed the $5 trillion threshold, making it the S&P 500's largest constituent, and investors were looking to its quarterly figures for signals about the broader direction of equities. Nvidia's stock was up 2.19% in pre-market trading.
Other Developments
Separately, oil prices extended their decline, with Brent crude falling to $85.10 a barrel, down more than 2% on the day and more than 9% on the week, as regional leaders held talks in the Middle East without producing any significant agreement. Also on investors' radar, Federal Reserve Chair Kevin Warsh was scheduled to speak Friday at the central bank's annual symposium in Jackson Hole, Wyoming. Piper Sandler's head of central bank policy, Kurt Lewis, told clients he expected Warsh to focus on high-level economic topics rather than offer concrete guidance on the path of interest rates.
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