Dow Jones Futures Rise on Inflation Data, Fed Rate Cut Odds

Dow Jones futures and major U.S. stock indexes have rallied recently, buoyed by positive market sentiment amid expectations of Federal Reserve rate cuts and easing U.S.-China trade tensions. Inflation data for July showed the Consumer Price Index (CPI) increased by 0.2% month-over-month and 2.7% year-over-year, slightly below expectations, while the core CPI rose 0.3% monthly and 3.1% annually, slightly above forecasts. The odds of a 25-basis-point Fed rate cut in September have risen above 89%, driven by cooling labor market conditions and higher-than-expected inflation readings. President Donald Trump extended the tariff truce with China for 90 days, with China agreeing to reduce non-tariff barriers and suspend certain export controls on U.S. firms, which has supported market optimism. Semiconductor companies Nvidia and AMD struck a deal to give 15% of revenues from certain chip sales in China to the U.S. government in exchange for export licenses, while Nvidia denied Chinese national security concerns regarding its AI chips. Investors are closely watching upcoming economic data, including inflation and producer price indexes, for signs on the Fed's monetary policy direction.