Wall Street futures rise after softer-than-expected U.S. inflation data

Wall Street experienced a rise in futures on Wednesday, following softer-than-anticipated U.S. inflation data. At 09:13 ET, S&P 500 and Nasdaq 100 futures were up by 0.4% each, while Dow futures added 0.3%. The U.S. Bureau of Economic Analysis reported that the headline PCE price index rose 0.3% month-over-month and 3.4% year-over-year in August, slightly lower than previously estimated figures of 0.4% and 3.7%.

On a core basis, the PCE price index increased by 0.2% month-over-month and 3% year-over-year in August, compared to 0.1% and 3% in July, falling short of the consensus numbers of 0.3% and 3.3%. Meanwhile, U.S. Treasury yields surged to multi-decade highs, driven by oil-related inflationary concerns, debt issuance by companies for AI infrastructure, hawkish Federal Reserve signals, and expanding U.S. fiscal debt.

The Federal Reserve had increased interest rates for the first time in over three years, signaling further policy tightening. The odds of another rate hike in October had risen since September, but took a hit when New York Fed President John Williams mentioned there was no urgency for more rate hikes. The PCE data dampened the chances of October policy tightening.

Tech caution grew ahead of Micron Technology Inc's fourth-quarter earnings, scheduled to be released after market close. Micron was expected to report robust year-over-year revenue growth and earnings per share, while analysts closely watched the company's outlook for AI-driven memory chip demand. Additionally, oil prices rebounded, as investors weighed the return of Middle East exports against potential disruptions in Strait of Hormuz shipments.