Dow Jones futures bounce back ahead of US inflation data for July

• Dow Jones futures recover in the overnight session as both the US and China agree to extend the tariff truce.
• Investors await the US inflation data for July.
• Economists expect the US CPI to have grown at a faster pace.

Dow Jones futures attract significant bids in the overnight session on Tuesday. United States (US) equity futures rebound as both the United States (US) and China have confirmed that they agreed to postpone the tariff truce for 90 days.

During the European trading session, Dow Jones futures trade 0.20% higher to near 44,050. S&P 500 futures add 19 points and rises to near 6,385.

Earlier in the day, the White House reported that President Donald Trump has signed executive orders to extend the tariff truce with Beijing for 90 days as both nations are still struggling to reach an agreement.  

Meanwhile, the Chinese Commerce Ministry also stated that it is working towards reducing non-tariff barriers to American companies, and will suspend adding some US firms to its unreliable entity and export control lists for 90 days. 

On Monday, Dow Jones closed 0.45% down below 44,000 amid uncertainty surrounding US-China trade talks.

Meanwhile, investors await the US Consumer Price Index (CPI) data for July, which will be published at 12:30 GMT. The US CPI report is expected to show that the impact of tariffs continues to feed into prices.

Economists expect the US headline inflation to have grown at a faster pace of 2.8% on year, against a 2.7% increase in June. In the same period, the core CPI - which excludes volatile food and energy prices - rose by 3.0%, faster than the prior reading of 2.9%.

The inflation data is expected to be limited on market expectations for the Federal Reserve's (Fed) monetary policy outlook as Federal Open Market Committee (FOMC) members have become more concerned over cooling labor market conditions.