Fed Policy Easing on Horizon Amid Inflation Trends

Wall Street prepares for cautious opening following U.S. CPI data, fueling expectations of Federal Reserve rate cuts in September. Inflation moderated to 2.9% year-on-year in July. Meanwhile, Kellanova surged after Mars proposed a $36 billion acquisition. Market volatility persists with mixed performances across major indices.

Wall Street is bracing for a muted start on Wednesday, following the release of U.S. CPI data that indicated inflation is moderating as expected. This development strengthens the consensus that the Federal Reserve might commence its policy easing cycle next month.

Data from the Labor Department showed U.S. consumer prices rose by 0.2% in July, pushing headline inflation to 2.9% year-on-year from the previous 3% in June. The numbers align with economists' forecasts and have left traders divided over whether to expect a 25 basis points or a 50 basis points rate cut in the Fed's upcoming September meeting.

Notably, tech giants and AI stocks like Nvidia, Super Micro, and Dell saw gains in premarket trading, while Alphabet slipped after reports indicated potential antitrust actions. Meanwhile, Kellanova saw a sharp rise following the announcement of a $36 billion acquisition deal by Mars.

(With inputs from agencies.)