On Tuesday, S&P 500 futures experienced a notable increase, primarily driven by a surge in Nvidia shares. Investors closely analyzed the latest U.S. inflation data, which played a significant role in shaping market sentiment. Futures associated with the S&P 500 rose by 0.3%, while Nasdaq 100 futures saw a more substantial gain of 0.6%. In contrast, the Dow Jones Industrial Average futures fell by 83 points, translating to a decrease of 0.2%.
According to the latest report, the consumer price index (CPI) for June increased by 0.3% month-over-month, resulting in an annual inflation rate of 2.7%. This figure aligns perfectly with a consensus poll conducted by Dow Jones. When we look at the so-called core CPI, which excludes volatile food and energy prices, it rose by 0.2% month-over-month, slightly under expectations. Year-over-year, the core CPI expanded by 2.9%, matching estimates. Scott Wren, senior global market strategist at Wells Fargo Investment Institute, highlighted the significance of the monthly CPI figures, noting that for five consecutive months, the headline CPI has come in below expectations, which carries meaningful implications for market dynamics.
In a positive development for the tech sector, Nvidia shares surged by over 4% in premarket trading after the company announced plans to resume sales of its H20 AI chips to China. The U.S. government has assured Nvidia that necessary licenses will be granted, and the company is optimistic about commencing deliveries soon, as stated in a Tuesday announcement.
As the earnings season unfolds, significant players in the financial sector reported their results on Tuesday morning. Wells Fargo exceeded earnings expectations; however, a reduction in guidance for net interest income led to a 2% drop in its share prices. Meanwhile, JPMorgan Chase shares declined by approximately 0.3%, despite the bank delivering stronger-than-anticipated second-quarter results, bolstered by robust trading and investment banking revenue. Citigroup shares, on the other hand, edged higher after surpassing second-quarter estimates.
As investors look ahead, there is a prevailing hope that the second-quarter earnings season will provide a boost to the stock market, which is currently hitting all-time highs. However, expectations remain subdued. According to FactSet data, the S&P 500 is projected to achieve a blended earnings growth rate of 4.3% year-over-year, marking the lowest growth rate for the index since the fourth quarter of 2023.
Wall Street wrapped up a positive trading session on Monday, with stocks managing to secure modest gains. This occurred despite President Donald Trump threatening a 30% tariff on imports from the European Union and Mexico, effective August 1. The market's resilience in the face of such threats underscores the complexities of current economic conditions and investor sentiment.