US Stocks Fall, Treasury Yields Rise on Inflation Data

U.S. stock index futures and major indexes fell slightly following the release of July inflation data, which came in largely in line with economist estimates, keeping expectations of a Federal Reserve interest rate cut in September intact. The Personal Consumption Expenditures (PCE) price index rose 0.2% in July and 2.6% annually, while the core PCE price index, excluding food and energy, increased 0.3% monthly and 2.9% yearly, marking the highest annual core inflation since February. Despite the inflation figures, the labor market's weakening conditions and dovish comments from Fed Chair Jerome Powell have increased market bets on rate cuts, with futures pricing in nearly 90% odds of a September reduction. Meanwhile, U.S. Treasury yields rose modestly, and the U.S. dollar index showed mixed movement against other currencies. Investors are also monitoring upcoming labor market reports and the impact of the end of tariff exemptions on import costs. Stocks like Dell Technologies and Caterpillar saw notable premarket declines, while companies such as Autodesk gained following strong earnings forecasts.