U.S. stock futures mixed as market shrugs off inflation report

U.S. stock futures were mixed Wednesday night after the market shrugged off the July inflation report and the Dow Jones Industrial Average and S&P 500 hit records.

Dow futures rose 9 points, or 0.03%. S&P 500 futures and Nasdaq 100 futures fell 0.02% and 0.14%, respectively.

In the regular trading session, 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 rose 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 (and 4.3% on a year-over-year basis). 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 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."

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

Dustin Qualley of Build Asset Management said he expects a continued decline, 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."

Baidu is scheduled to report earnings before the opening bell. Palantir and CyberArk Software are also set to report later in the day.

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