US pre-open: Futures dip before inflation data

(Sharecast News) - US stock futures were pointing to a negative start on Wall Street on Thursday ahead of the release of June's consumer price index, which is expected to show a slight slowdown in inflation. Futures on the Dow, S&P 500 and Nasdaq were all showing losses of around 0.1% in pre-market trading, ahead of the CPI release at 0830 EDT. Both the S&P 500 and Nasdaq set new all-time highs on Wednesday.

The year-on-year change in the US CPI is pencilled in at 3.1%, down from 3.3% in May, according to consensus estimates. If correct this will be the third straight month of disinflation and will match the lowest annual inflation rate registered over the past 12 months (having already fallen to 3.1% in November and January).

Inflation has stayed above the 3% mark since April 2021, and investors are hoping that price growth continues to fall closer to the Federal Reserve's 2% target in the coming months to enable the central bank to begin cutting interest rates.

However, according to analyst Patrick Munnelly from Tickmill, "while [Fed chair Jerome] Powell is considering a potential rate cut, some argue it may be premature".

"The reliance on flexible prices to reduce inflation poses a risk, and more progress is needed on sticky items. Small upside surprises this month could cause uncertainty in the market regarding the timing of the first rate cut."

Also due out at 0830 EDT is jobless claims data for the week ended 5 July. Initial filings for unemployment benefits are expected to have dipped to 236,000 last week, from 238,000 the week before.

In corporate news, Costco will be in focus after shares rose strongly after-hours on the back of the wholesale retailer's announcement of its first price increase in seven years. The company said it was hiking its annual membership price by $5.