LIVE MARKETS-US stock futures rally after roughly in-line CPI data

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

U.S. STOCK FUTURES RALLY AFTER ROUGHLY IN-LINE CPI DATA

The main U.S. equity index futures are higher, while the U.S. 10-year Treasury yield is little changed, after the release of the latest data on U.S. consumer prices, which came in roughly in line with estimates.

E-mini S&P 500 futures EScv1 are now up around 0.4% vs roughly flat just before the numbers came out.

July headline CPI month-over-month was in line with the estimate, while the year-over-year print was cooler-than-expected. The month-over-month core number was in line with the Reuters Poll, while the year-over-year core number was hotter-than-expected.

Separately, July NFIB business optimism, which was released at 6:00 a.m., came in at 100.3 vs 98.6 last month.

According to the CME's FedWatch Tool, the probability that the Federal Reserve delivers a 25 basis point rate cut at its September 16-17 FOMC meeting is now around 94% vs 82% just before the data was released. The chance the FOMC leaves its current target rate of 4.25%-4.50% unchanged is now around 6% vs 18% prior to the numbers.

Looking out further out into 2025, the market is showing a bias for two more rate cuts to occur with one in October and one in December. Interest rate probabilities are pricing in a total of 57 basis points of cuts through year-end.

The U.S. 10-Year Treasury yield US10YT=RR is now around 4.27%. It was around 4.29% just before the numbers came out. The yield ended Monday at 4.273%.

All S&P 500 index .SPX sector SPDR ETFs are quoted up in premarket trade. Consumer discretionary XLY.P and tech XLK.P, both up around 0.8%, are posting the biggest gains.

The SPDR S&P regional banking ETF KRE.P is trading up more than 1%.

Regarding the inflation data, Brian Jacobsen, chief economist at Annex Wealth Management, in Brookfield, Wisconsin, said:

"The core message in core inflation is that any tariff-induced inflation is likely to be a process, not an event. Eventually, tariffs can show up in varying degrees in consumer prices, but these one-off price increases don’t happen all at once. That will confound the Fed and economic commentators for months to come."

Jacobsen added, "As long as breakeven inflation rates and other market-based measures of inflation expectations stay contained, the Fed should feel comfortable enough to recommence cutting in September."

Here is a premarket snapshot from around 08:53 a.m. EDT:

(Terence Gabriel, Medha Singh)

*****

EARLIER ON LIVE MARKETS:

RUSSIAN GAS TAPS TO EUROPE UNLIKELY TO FLOW ANYTIME SOON CLICK HERE

THE FED: IT'S COMPLICATED! CLICK HERE

TARIFF U-TURN STEADIES GOLD, UBS KEEPS $3,500 VIEW CLICK HERE

STOXX NUDGES UP, BUT STUCK IN RANGE CLICK HERE

BEFORE THE BELL: EUROPEAN FUTURES EDGE UP CLICK HERE

TRUCE EXTENDED, ECONOMIC DATA NEXT CLICK HERE