FX.co ★ US Stocks Pick Up Traction After PPI

US equity futures edged higher on Wednesday as evidence mounted that the conflict in the Middle East has been less inflationary than initially feared. Futures on the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 each gained about 0.2%.

Both headline and core producer prices for June increased by less than economists had expected, reinforcing the softer-than-anticipated CPI data released yesterday. Together, the reports further reduced the likelihood that the Federal Reserve will raise interest rates at its upcoming meeting. This benign inflation data helped counterbalance concerns stemming from higher energy prices amid escalating strikes and tensions between the US and Iran.

US Treasury yields continued to climb, but robust corporate earnings supported broad gains in equities. The heavyweight AI sector advanced after ASML delivered strong signals on demand, boosting shares of AMD and Intel in premarket trading, though memory-chip makers remained volatile.

Morgan Stanley rose about 1% after reporting upbeat quarterly results, extending the run of strong earnings from major banks including JPMorgan, Bank of America, Citigroup, and Goldman Sachs, all of which posted solid performances yesterday.