US equity futures are mixed as market ignores inflation report

U.S. equity futures were mixed on Wednesday night after the market ignored July’s inflation report and the Dow Jones Industrial Average and S&P 500 hit record highs.

Dow futures rose 9 points, or 0.03%. S&P 500 and Nasdaq 100 futures were down 0.01% and 0.10% respectively.

During the regular trading session, the Dow Jones gained 0.6% to reach 35,484.97 and close at a new high. The S&P 500 rose 0.2% to an all-time high of 4,447.70. The Nasdaq Composite traded around 0.1% lower to 14,765.13.

The Labor Department said the consumer price index rose 5.4% from the previous year, for the month of July, and 0.5% from the previous month.

Core inflation, however, only rose 0.3% in July (and 4.3% year-on-year). Core inflation excludes energy and food prices and is considered a more reliable measure by economists because energy and food prices can be very volatile.

“Inflation has, at the very least, taken a break,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “For the main figures and the basic figures, the monthly and annual figures were stable or down compared to last month. Based on this data, inflation is certainly not unstoppably increasing.”

Treasury yields fell after the inflation report and a 10-year auction showed strong demand. Dallas Fed Chairman Robert Kaplan told CNBC that the Fed is expected to start removing stimulus in October, adding to lower yields.

“The story of inflation is more about single components than general price increases, and even those components are showing signs of peaking,” McMillan said. “As we dig into the numbers, inflation is higher than it was, but showing signs of reversing and returning to more comfortable levels.”

Investors are keeping tabs on weekly jobless claims data, which will be released on Thursday morning.

Dustin Qualley of Build Asset Management said he expects a continued decline, which would support the narrative of a strengthening job market.

This is a more frequent indicator than the wage bill, ”he said. “If claims were to increase unexpectedly, I’m afraid this recovery will take longer than expected. An unexpected spike in payroll would be bullish for rates. “

Baidu is expected to report its profits before the opening bell. Palantir and CyberArk Software are also expected to report later today.