Dow Jones futures rise as US inflation data fuels Fed rate cut hopes

• Dow Jones futures advanced as US inflation data reinforced expectations of a Fed rate cut in September.
• The S&P 500 and Nasdaq Composite finished at all-time highs on Tuesday.
• Cava shares sank more than 22%, while CoreWeave slipped roughly 9% during futures trading.

Dow Jones futures edged up in early European trading on Wednesday, ahead of the regular United States (US) market open, hovering near 44,600 with a 0.09% gain. S&P 500 futures climbed 0.12% to above 6,450, while Nasdaq 100 futures advanced 0.19%, trading above 23,900.

US stock futures appreciate due to improved market sentiment, driven by the latest United States (US) inflation data, which strengthened expectations for a US Federal Reserve rate cut in September. Markets are now pricing in approximately 94% odds of a Fed rate cut at the September meeting, up from 86% a day ago, according to the CME FedWatch tool.

The US Consumer Price Index (CPI) climbed 2.7% year-over-year in July, matching the 2.7% increase seen in the prior month, and came in below the expected 2.8% increase. Meanwhile, the annual core CPI rose by 3.1% in July, compared to the 2.9% rise seen in June, above the market consensus of 3%.

The S&P 500 and Nasdaq Composite ended the previous regular session at record highs, boosted by easing inflation concerns. On Tuesday, the S&P 500 climbed 1.13% to 6,445, while the Nasdaq advanced 1.33% to 23,839.

Market sentiment also improved following the Trump administration's decision to extend the implementation of sweeping tariffs on China for an additional 90 days. China also decided to suspend additional tariffs on US goods for the same period.

Moreover, US Treasury Secretary Scott Bessent said early Wednesday that US and Chinese trade officials will meet again within the next two to three months to discuss the future of their economic ties. Bessent added that "The US would need to see sustained progress on curbing fentanyl flows from China, potentially over months or even a year, before considering tariff reductions."

During after-hours trading, Cava shares tumbled over 22% following weaker-than-expected second-quarter revenue growth and a downward revision to its full-year same-store sales forecast. CoreWeave shares fell around 9% after delivering a mixed quarterly report, despite strong revenue growth, per CNBC.