July 14 (Reuters) – U.S. stock index futures were mixed on Tuesday as investors braced for a pivotal inflation report and earnings from Wall Street’s biggest banks, while U.S.-Iran tensions sent oil prices surging and threatened to reignite price pressures.
JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup are set to kick off the second-quarter earnings season on Tuesday.
Investors will scrutinize the results for early signals on the health of corporate America.
The earnings season could prove a key test for this year’s equity rally, which has lifted the benchmark S&P 500 by about 10%.
June consumer price index data, due at 8:30 a.m. ET, is expected to show inflation eased last month. A slowdown may offer little reassurance to households and markets, with Middle East tensions threatening to lift energy costs again, keeping the Federal Reserve on guard.
“Gasoline prices are already back above June levels, meaning the next inflation report will heat up again. So today’s CPI figures may matter less than the re-escalating geopolitical tensions,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The data will be followed by remarks from Fed Chair Kevin Warsh, who is scheduled to deliver the central bank’s semi-annual monetary policy report to Congress at 10 a.m. ET.
Investors were also unsettled by hawkish comments from Fed Governor Christopher Waller, who said on Monday that the central bank may need to raise interest rates “in the near term” if inflation remains well above its 2% target.
Traders are pricing in a 43% chance of a quarter-point rate increase at the Fed’s July 29 meeting, up from 34% a day earlier, according to CME’s FedWatch tool.
Those expectations, combined with a third straight night of U.S. military strikes against Iran and the possibility of a 20% fee on cargo ships passing through the Strait of Hormuz, kept markets cautious. Oil futures rose to their highest in four weeks.
At 05:13 a.m. ET, Dow E-minis were down 118 points, or 0.22%, and S&P 500 E-minis were down 1 point, or 0.01%. Nasdaq 100 E-minis were up 142.75 points, or 0.48%.
Nasdaq futures gained ground after the tech-heavy index fell 1.6% on Monday. Chip stocks steadied in premarket trading after sharp losses in the previous session, with the iShares Semiconductor ETF rising 2.4%.
(Reporting by Ragini Mathur in Bengaluru; Editing by Mrigank Dhaniwala)
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