U.S. stock index futures traded higher on Wednesday, indicating Wall Street could extend the previous session’s gains after fresh inflation data strengthened expectations that the Federal Reserve may be able to keep interest rates on hold.
Producer price data adds to inflation optimism Investor sentiment improved after the U.S
Labor Department reported that producer prices fell by 0.3 percent in June, a larger decline than economists had expected. The previous month’s increase was also revised lower to 0.6 percent from an earlier estimate of 1.1 percent. On an annual basis, producer price inflation slowed to 5.5 percent from a revised 6.0 percent in May, coming in below forecasts of 6.2 percent.
The figures followed Tuesday’s softer-than-expected consumer inflation report, reinforcing expectations that price pressures in the U.S. economy may continue to ease. Oil prices remain a source of uncertainty Despite the encouraging inflation data, gains in equity futures were tempered by rising crude oil prices as geopolitical tensions in the Middle East continued to escalate. During an interview with Fox News, President Donald Trump warned that the United States could target Iran’s power plants and bridges next week “unless they get to the table and negotiate.” Higher energy prices continue to raise concerns that inflation could remain elevated despite recent improvements in broader price data.