Futures Rise Into the July CPI as AI Earnings Ignite the Tape

Georgi Kuzmanov Senior Equity Analyst & Founder Columbia MSFE · 13+ years equity research

The last major inflation reading before the Federal Reserve’s September meeting arrives at 8:30 a.m. Eastern this morning, and U.S. stock futures are leaning into it with cautious optimism. S&P 500 futures are up roughly 0.2%, Dow futures about 0.1% and Nasdaq 100 futures close to 0.5%, positioning the cash index — which closed Tuesday at 7,728.20 after a modest pre-data pullback — within striking distance of Monday’s record close of 7,757.64.

The setup favors the optimists. Economists expect headline CPI to have cooled to 3.4% year over year in July from 3.5% in June, with core inflation — the line the Fed actually trades — edging down to 2.5% from 2.6%, per consensus estimates cited by FXStreet. June’s report surprised to the downside, snapping the rate from 4.2% in May, and prediction markets are positioned for a repeat: Kalshi odds imply a tame July print with little chance of an upside surprise. What the number means for a divided Federal Reserve is the day’s real story. Three FOMC members dissented in favor of a rate hike at the July meeting, and a second straight cooling print would undercut their case.

The inflation report does not arrive to an empty tape. Overnight delivered a full-blown AI-infrastructure earnings wave — CoreWeave is up nearly 19% premarket after what CNBC called a “cleaner quarter,” Super Micro is up 9% on an earnings blowout, Lumentum is up 8% after a beat that drew a Morgan Stanley target raise, and Nebius is up 9% in sympathy — all hours before Cisco, the best-performing Dow stock of 2026, reports after the closing bell. In the background, the energy wildcard keeps flickering, with President Trump declaring the U.S. has “total control” of the Strait of Hormuz even as negotiators hint a U.S.–Iran arrangement may be close.

Pre-Market Snapshot

Futures and prices as of approximately 6:15 a.m. Eastern.

Overnight Developments

Tuesday’s tape: a quiet de-risk at the record

Tuesday was a positioning session, and it looked the part. The S&P 500 slipped 0.32% to 7,728.20, the Dow fell 0.34% to 53,791.85 and the Nasdaq Composite dropped 0.60% to 26,445.44, with megacap technology bearing the brunt of the trimming — Alphabet fell 3.8%, Oracle 3.7%, Amazon 2.1% and Apple 1.1%. The more telling move was under the surface: the Russell 2000 rose 0.32% to 3,027.12, a classic rotation toward rate-sensitive names ahead of an inflation print that could take a September hike off the table. The VIX at 15.42 sits near its 2026 low — the options market is pricing an event, not a scare.

Goolsbee keeps the Fed’s focus on inflation

Chicago Fed President Austan Goolsbee said Tuesday that policymakers remain more focused on the risk of persistently elevated inflation than on potential weakness in the labor market — a hawkish-leaning signal hours before the data that will test that stance. The context matters: the Fed held the funds rate at 3.50%–3.75% on July 29 for a fifth straight meeting, but three members dissented in favor of a quarter-point hike, and the first outright payroll loss of 2026 in the June jobs report shattered September hike odds and left the meeting roughly a coin flip. Today’s CPI is the tiebreaker, with the July FOMC minutes due August 19 and the Jackson Hole symposium August 27–28 — where Chair Kevin Warsh will frame the reaction function — close behind.

An AI earnings wave lifts the neoclouds and the optics

The overnight earnings cluster was the strongest of the season for the AI-infrastructure trade. CoreWeave reported second-quarter revenue of $2.58 billion, ahead of the $2.56 billion consensus, with a net loss of $1.03 per share — narrower than the $1.21 loss analysts expected — and the stock is up 18.7% premarket to about $107. Super Micro posted fiscal fourth-quarter earnings of $1.70 per share against a $0.96 consensus, a blowout that overshadowed a slight revenue miss ($11.12 billion versus $11.56 billion expected), and the shares are up 9.2% to $34.51; Needham reiterated its Buy rating and $46 target this morning. Lumentum, which reported Tuesday, beat on both lines — $3.23 per share versus $2.97 expected on revenue of $1.01 billion — and Morgan Stanley raised its target on the margin outlook this morning, sending the stock up 8.3% to $888.75 premarket.

The sympathy move is as notable as the beats themselves. Nebius is up 8.7% at $210.07 despite a freshly disclosed short position from Michael Burry, and Coherent is up 5.4% at $346.45 ahead of its own report after the close — traders are treating the Lumentum print as a read-through for the entire photonics complex. Micron, which has been under pressure after a recent 11% slide, is bouncing 2.9% to $893.35.

Hormuz brinkmanship keeps a floor under oil

The geopolitical temperature rose again overnight. President Trump said the U.S. has “total control over the Strait of Hormuz” as negotiations over the waterway remain deadlocked, while Pakistan’s defense minister countered that Washington and Tehran are “close to some sort of arrangement,” and back-channel talks between Iran and Oman are reported to be at an advanced stage. The Associated Press reports U.S. forces fired on ships it says were attempting to break the blockade of Iranian ports, and the White House has pivoted back toward sanctions as other strategies falter; a Jones Act waiver for foreign ships moving energy and fertilizer was extended 90 days. Against that, the supply picture softened: the API reported a 9.1-million-barrel build in U.S. crude inventories last week, the largest since February, with the official EIA data due at 10:30 a.m. WTI is steady near $83.00 and Brent at $88.64 — but crude remains up more than 30% from a year ago, which is precisely the pass-through risk hanging over this morning’s report.

Global Markets

Asia finished mostly higher. Japan’s Nikkei rose 0.8% to 67,524, and South Korea’s KOSPI was the regional standout, jumping 3.7% to 6,579. Mainland China rebounded on a tech bid — the Shanghai Composite added 0.3% to 3,947 and the Shenzhen Component gained 1.1% — while Hong Kong’s Hang Seng slipped 0.8% to 25,440 on tech profit-taking. Australia’s ASX 200 fell 0.8%. A telling data point: Japan’s machine-tool orders surged 50.4% year over year in July, the kind of capital-goods signal that fits the global AI build-out narrative driving this morning’s U.S. earnings reaction.

Europe is modestly higher at midday. The FTSE 100 is up 0.1% at 10,854, the DAX up 0.4% at 26,495, the CAC 40 little changed at 8,712 and Milan’s FTSE MIB up 0.2%. Sector breadth is constructive — materials, industrials and communications lead, while health care and staples lag. Germany’s final July CPI was confirmed at 2.8% year over year, up from 2.3% in June — a reminder that the inflation question being asked in Washington this morning is a global one.

Macro and Rates

Treasuries are rallying gently into the number, with the 10-year yield down about 2 basis points at 4.67% — its second consecutive daily decline — and the 2-year off a similar amount at 4.21%, leaving the 2s/10s curve near +46 basis points. The bond market is positioned for a cool print, which is precisely what makes an upside surprise dangerous. The dollar is quiet: DXY sits just under 99.85, EUR/USD at 1.1536, GBP/USD at 1.3518 and USD/JPY at 159.18.

Gold is recouping Tuesday’s dip, up 1.0% at $4,415 an ounce — still up more than 31% year over year, though below January’s record of $5,608 — with central-bank demand the steady bid underneath: China’s central bank added about 20 tons in July after roughly 15 tons in June, its largest monthly purchase since October 2023. Silver is up 2.6% at $66.36. Oil is the counterweight: WTI at $83.00 and Brent at $88.64 leave crude up more than 32% from a year ago, the channel through which the Hormuz standoff reaches consumer prices. And the rate-sensitive economy keeps cooling in the background — July existing-home sales fell 1.7% as record prices and high mortgage rates sidelined buyers.

Corporate News

Cisco reports after the close (conference call 4:30 p.m. ET), and it is the corporate event of the day. The stock is the Dow’s best performer of 2026, up 58% year to date, after the company raised its fiscal-year AI infrastructure order target to $9 billion from $5 billion. Consensus expects fiscal fourth-quarter earnings of $1.17 per share on revenue of $16.83 billion; the Street is a Moderate Buy with targets up to $150 (Bank of America), roughly 25% above Tuesday’s $120.43 close, and the shares are up 1.5% premarket. At about 27 times forward earnings, the AI order book — and guidance — have to do the talking.

Coherent also reports tonight, with consensus at $1.62 per share on $1.98 billion of revenue; the stock is up 5.4% premarket on the Lumentum read-through. Elsewhere: Toyota is recalling 655,000 Camry sedans over a display error that can deactivate turn signals; the administration is fighting a trade judge’s order that would force tariff refunds to all importers — a case with real fiscal and margin implications for import-heavy sectors; and Michael Burry’s newly disclosed short in Nebius is the counter-narrative to this morning’s AI euphoria.

Premarket Movers

Economic Calendar

Beyond the data, the July FOMC minutes land next Wednesday (August 19) and the Fed’s Jackson Hole symposium follows August 27–28, where Chair Kevin Warsh’s keynote will be the market’s next set-piece after this week’s inflation prints.

The AlphaEdge Prediction

Expect a two-part session: a quiet, futures-guided drift until 8:30 a.m., then a fast repricing once the core line prints. The AI earnings tailwind and tonight’s Cisco report provide support underneath, but the CPI owns the day’s direction.

Base case: An in-line print (headline near 3.4%, core near 2.5%) produces a relief bid. The S&P 500 trades a 7,700–7,800 range and closes higher, retaking Monday’s record close of 7,757.64 as September hike odds fade and the AI earnings momentum carries into the afternoon.

Bull case: Core at or below 2.4% forces a dovish repricing — the 10-year slips toward 4.60%, the index pushes through 7,800 to fresh records, and small caps extend their catch-up trade.

Bear case: A core print at or above 2.6% — or a headline surprise with oil firm — re-prices a September hike, sends the 10-year toward 4.75%, and knocks the index back through 7,700 toward a test of 7,650, with the high-multiple AI names fading their premarket gains.

Wednesday is a referendum on the disinflation trend, and the market walks into it near records with a dovish-leaning bond market, a hawkish Fed minority and a genuine AI earnings wave underneath. The core line at 8:30 decides which narrative owns the tape into Jackson Hole. The disciplined posture: respect the momentum the earnings wave is creating, but let the print prove the trend before adding exposure — and keep one eye on Hormuz, the one variable this report cannot settle.

Georgi Kuzmanov

Senior Equity Analyst & Founder at AlphaEdge. Columbia University MSFE (2011–2013). Covering equities, macro, and geopolitics for serious investors.