FX.co ★ US Futures Rebound on Soft CPI

US stock index futures rebounded on Tuesday after softer inflation data largely removed the prospect of a Federal Reserve rate hike this month. Futures on the S&P 500 reversed earlier losses to trade 0.3% higher, while Nasdaq 100 contracts climbed nearly 1%. Dow futures, which had been pointing to a 500-point decline, recovered to indicate a flat open.

Both headline and core inflation came in below expectations, easing fears that persistent underlying price pressures would force the Fed to resume rate increases at its next meeting. The data helped offset the drag from another leg higher in energy prices, even as the United States and Iran continued to exchange strikes.

Semiconductor stocks rebounded from Monday’s selloff, with Micron and SanDisk each rising about 5% in premarket trading. By contrast, major US banks were under pressure. JPMorgan fell 2.5% despite reporting record quarterly profits, Bank of America slipped 0.8% after beating earnings estimates, and Wells Fargo dropped 2% even though its results were also judged better than expected.