Traders work on the floor of the New York Stock Exchange.
U.S. stock futures were mostly flat Thursday after the market shrugged off a jump in consumer prices in the prior session with the Dow Jones Industrial Average and S&P 500 hitting records.
Investors are awaiting two key pieces of economic data and one big earnings report from a Dow member on Thursday. At 8:30 a.m. ET, weekly jobless claims are expected to total 375,000, down from 385,000 in the prior week, according to economists polled by Dow Jones.
Also, July producer prices will be released at 8:30 a.m. following Wednesday’s CPI data. The PPI is expected to gain 0.6% month-over-month, moderating from June’s 1% pace.
Dustin Qualley of Build Asset Management said he expects a continued decline in claims, which would support the narrative of a strengthening jobs market.
“This is a more high-frequency indicator than payrolls,” he said. “Should claims unexpectedly spike, I worry this recovery will take longer than expected. An unexpected spike in payrolls would be bullish for rates.”
The 10-year Treasury yield was about flat into the report.
Dow member Disney will report earnings after the closing bell. The shares, down slightly in 2021, were flat in the premarket. Micron shares fell 2% in extended trading after Morgan Stanley predicted a slowdown in the memory chip market and downgraded the stock.
On Wednesday, the Dow gained 0.6% to reach 35,484.97 and close at a new record. The S&P 500 rose 0.2% to an all-time high of 4,447.70. The Nasdaq Composite traded about 0.1% lower to 14,765.13.
The Labor Department reported that the consumer-price index surged 5.4% from a year earlier, for the month of July, and 0.5% from the previous month.
Core inflation, however, rose by just 0.3% in July, below the 0.4% increase forecast. Core inflation excludes energy and food prices and is considered a more reliable measure by economists since energy and food prices can be so volatile.
“Inflation has, at a minimum, paused,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “For both the headline and core figures, the monthly and annual numbers were stable or down from last month. Based on that data, inflation is certainly not on an unstoppable increase.”
Treasury yields dipped after the inflation report and as a 10-year note auction showed strong demand. Dallas Fed President Robert Kaplan told CNBC the Fed should start removing stimulus in October, adding to the decline in yields.
“The inflation story is more about isolated components, rather than general increases in prices, and even those components are showing signs of peaking,” McMillan said. “As we dig into the numbers, inflation is above where it has been but is showing signs of rolling over and returning to more comfortable levels.”