Source: Sharecast
As of 1240 BST, Dow Jones futures were up just 0.29%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.19% and 0.23% firmer, respectively.
The Dow closed 483.52 points higher on Tuesday, more than reversing losses recorded in the previous session.
Yesterday's CPI reading was still in focus early on Wednesday after the report suggested that while underlying pressures remained, particularly in shelter and services, the broader inflation picture may be stabilising. July's CPI reading comes ahead of the Federal Open Market Committee's September policy meeting, with investors betting that it increases the likelihood that the central bank will cut interest rates at said meeting.
Rostro's Joshua Mahony said: "Yesterday's US inflation report provided a somewhat perverse situation where markets become increasingly confident in Fed easing despite a five-month high for the core CPI metric (3.1%). It is unlikely that we will see that core CPI figure get anywhere near the 2% Fed target this year, but markets are confident that the Fed will overlook the data to slash rates in the months to come. Market pricing for a rate cut at each of the remaining three meetings of 2025 have tipped above the 50% mark, meaning that it is now the base case scenario that we see rates at least 75bp lower by year-end. No wonder markets are in buoyant mood, with a goldilocks scenario developing where the Fed will cut rates based on poor jobs data that could be lagging in nature given the trade uncertainty that has largely been clarified.
"Trump continues to wreak havoc on the status quo, with the President threatening to sue Powell as he pressures the chair to cut rates immediately. The ability to sue Powell remains questionable, but the fact is that the jobs report has at least provided the FOMC with a justification of drastic action should they need it. That could include a 50bp cut, or a cut prior to the September meeting. Meanwhile, Trump's new BLS chief has suggested shifting the monthly jobs report to a quarterly format in a bid to end the kind of huge data revisions seen of late. Nonetheless, this appears to be a case of Trump simply hiding the data that he does not like, providing the President with the ability to simply talk up the economy without the pesky facts."
On Wednesday's macro slate, US mortgage applications were up by double digits in the week ended 8 August, according to the Mortgage Bankers Association of America. Mortgage applications surged 10.9% week-on-week, building on the prior week's unrevised 3.1% increase and marking the sharpest increase in mortgage demand in the last two months. Applications to refinance a mortgage, which are more sensitive to short-term changes in interest rates, shot up 23% week-on-week, while applications to purchase a home rose just 1.4%.
Market participants will also likely be tuned into speeches from Chicago Federal Reserve president Austan Goolsbee and Atlanta Fed head Raphael Bostic at 1800 BST, with traders hoping to gain some insight into the central bankers' thinking following yesterday's CPI reading.
No major corporate earnings were slated for release on Wednesday.
Reporting by Iain Gilbert at Sharecast.com