Stocks Rise Before the Open After Key U.S. Inflation Data was Released

September S&P 500 E-Mini futures (ESU25) are up +0.23%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.31% this morning.

U.S. consumer prices increased more than anticipated in August. For the month, the consumer price index grew by a seasonally adjusted 0.4%, which was twice the rate of the previous month. This pushed the annual inflation rate to 2.9%, marking a 0.2 percentage point increase and the highest level since January. This, combined with an increase in jobless claims, presents a challenging economic picture for the Federal Reserve as it prepares for its upcoming meeting.

In yesterday’s trading session, Wall Street’s major indices ended mixed, with the S&P 500 notching a new record high. Oracle (ORCL) jumped over +35% and was the top percentage gainer on the S&P 500 after the enterprise software giant gave an aggressive forecast for its cloud business. Also, stocks tied to AI computing infrastructure soared on Oracle’s upbeat outlook, with CoreWeave (CRWV) surging more than +16% and Broadcom (AVGO) climbing over +9% to lead gainers in the Nasdaq 100. In addition, GameStop (GME) rose over +3% after the videogame retailer reported stronger-than-expected Q2 results. On the bearish side, Synopsys (SNPS) plummeted more than -35% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the chip design software company reported downbeat FQ3 results and issued below-consensus FQ4 guidance.

Economic data released on Wednesday showed that the U.S. producer price index for final demand fell -0.1% m/m and rose +2.6% y/y in August, weaker than expectations of +0.3% m/m and +3.3% y/y. Also, the core PPI, which excludes volatile food and energy costs, fell -0.1% m/m and rose +2.8% y/y in August, weaker than expectations of +0.3% m/m and +3.5% y/y.

“The worst-case scenario on inflation isn’t playing out,” said David Russell at TradeStation. “The doves will be happy to see the year-over-year number back below 3%. Combined with the weak jobs data recently, this keeps us on track for rate cuts. However, the speed and intensity might depend more on the big consumer index.”

Meanwhile, U.S. rate futures have priced in a 100% chance of a 25 basis point rate cut and an 8.0% chance of a 50 basis point rate cut at next week’s monetary policy meeting.

Today, all eyes are focused on the U.S. consumer inflation report. Market watchers will assess the extent to which hefty U.S. tariffs are passing through to consumers. Slower price growth could reinforce expectations for a series of rate cuts after a likely move next week, while hotter-than-expected inflation may lead investors to price in a more cautious pace of easing. 

On the earnings front, Photoshop maker Adobe (ADBE) is set to report its FQ3 earnings results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.042%, up +0.35%.

The Euro Stoxx 50 Index is up +0.19% this morning as investors hold back on major bets ahead of the European Central Bank’s monetary policy decision and the U.S. inflation report. Defense stocks outperformed on Thursday as investors assessed ongoing geopolitical tensions in Eastern Europe after Poland shot down Russian drones that violated its airspace earlier in the week. Financial stocks also gained ground. Meanwhile, investors are awaiting the ECB’s interest rate decision later in the session. The central bank is widely expected to keep the deposit rate unchanged at 2.00%, with analysts anticipating no more cuts this cycle. RBC Capital Markets said, “We think the ECB is on hold now for the foreseeable future and its policy rate will remain at 2%.” Investors will pay close attention to President Christine Lagarde’s remarks on inflation, including the ECB’s first quarterly forecasts since the European Union struck a trade deal with the U.S. that set tariffs on the bloc’s goods at 15%. In other news, Citigroup downgraded France’s equities to Neutral from Overweight following the collapse of Prime Minister Francois Bayrou’s government earlier this week. In corporate news, Buzzi Unicem Spa (BZU.M.DX) surged over +7% after JPMorgan upgraded the stock to Overweight from Equal Weight.

The European economic data slate is empty on Thursday.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.65%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.22%.

China’s Shanghai Composite Index erased earlier losses and closed higher today on renewed optimism surrounding AI and related industries. AI-related stocks rallied on Thursday after Oracle’s multibillion-dollar contract wins reassured investors that demand for AI-powered cloud computing remains strong, easing concerns over lofty valuations of tech companies. At the same time, healthcare stocks slumped after The New York Times reported that the Trump administration is weighing tighter restrictions on the increasing flow of experimental drugs from China. The proposed measures could include tighter scrutiny of deals where U.S. pharmaceutical firms acquire rights to experimental drugs from Chinese companies, along with discouraging dependence on clinical-trial data generated in China. Meanwhile, China’s state planner said on Wednesday that the country will fully leverage fiscal and monetary policies and enhance its policy toolkit to meet annual economic goals, as the economy grapples with rising complexity and uncertainties. Zheng Shanjie, chairman of the National Development and Reform Commission, said in a report to lawmakers that China will intensify efforts to stabilize employment, businesses, markets, and expectations, according to state-run news agency Xinhua. In corporate news, China Pacific Insurance rose about +3% in Hong Kong after the insurer said it plans to issue $2 billion in zero-coupon convertible bonds, aiming to secure medium- to long-term offshore funding at low costs.

Japan’s Nikkei 225 Stock Index closed higher and hit a new record high today, with the index primarily being supported by strength in the technology sector. Technology stocks led the gains on Thursday, with SoftBank Group surging about +10% after its major shareholding Arm Holdings advanced in Wednesday trading in New York on Oracle’s blowout outlook. At the same time, financial stocks underperformed. Data released on Thursday showed that Japan’s wholesale inflation accelerated slightly in August due to steady increases in food costs, underscoring persistent inflationary pressure that may sustain expectations for a Bank of Japan interest rate hike by year-end. Separately, a government survey showed that business sentiment among major Japanese companies unexpectedly turned positive in the third quarter, supported by recovering chip demand and easing concerns over U.S. tariffs. Meanwhile, foreign investors bought a net 108.6 billion yen worth of Japanese stocks in the week to September 6th, following two consecutive weeks of profit-taking, according to data from Japan’s Ministry of Finance. In corporate news, Kansai Electric Power gained about +3% after activist investor Elliott Management, which recently disclosed a stake in the company, urged it to sell 150 billion yen ($1 billion) annually in non-core assets and use the proceeds to raise dividends and repurchase shares. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.78% to 24.54.

The Japanese BSI Large Manufacturing Conditions Index stood at 3.8 in the third quarter, stronger than expectations of -3.3.

The Japanese August PPI fell -0.2% m/m and rose +2.7% y/y, compared to expectations of -0.1% m/m and +2.7% y/y.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) gained about +0.5% in pre-market trading after DA Davidson upgraded the stock to Buy from Neutral with a price target of $210.

Oxford Industries (OXM) surged over +15% in pre-market trading after the company posted better-than-expected Q2 adjusted EPS and reiterated its full-year guidance.

Opendoor Technologies (OPEN) jumped more than +36% in pre-market trading after the company appointed former Shopify Chief Operating Officer Kaz Nejatian as its new CEO.

United Parcel Service (UPS) slid over -2% in pre-market trading after BofA downgraded the stock to Underperform from Neutral.

Advanced Micro Devices (AMD) fell more than -1% in pre-market trading after Erste Group downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - September 11th

Adobe (ADBE), Kroger (KR), RH (RH), Kestra Medical Technologies (KMTS), Kalvista Pharma (KALV), IBEX (IBEX), Frequency Electronics (FEIM), Lovesac (LOVE), Cheetah Mobile Inc (CMCM), Hooker Furniture (HOFT), RF Industries (RFIL), Vera Bradley (VRA), Farmer Bros. Co (FARM).