Why US Futures Are Higher Before July PPI

U.S. equity futures pointed modestly higher on Thursday, with Dow E-minis up 128 points, or 0.24%, S&P 500 E-minis up 12.5 points, or 0.16%, and Nasdaq 100 E-minis up 5.5 points, or 0.02%, by mid-morning European time. The gains came as Brent crude futures fell 1.9%, breaking a six-session run of increases, and investors turned attention to July producer price data due at 14:30 Dutch time.

The PPI release follows favorable July consumer inflation data that strengthened expectations the Federal Reserve will leave interest rates unchanged at its next meeting. Money-market participants using CME’s FedWatch tool put the probability of a rate hold at 66%, up from a near-even split between a rate increase and a pause on Wednesday.

In premarket corporate moves, Dell Technologies rose 4% and HP gained 1.8% after Chinese peer Lenovo’s results beat expectations. Cisco Systems fell 6% despite forecasting fiscal 2027 revenue above Wall Street expectations, while AI chip designer Cerebras Systems dropped more than 18% after missing quarterly revenue estimates.

Broader sentiment remained supported by solid earnings across sectors, with the Dow and S&P 500 near record highs and the Nasdaq roughly 2% below its all-time high. The tech-heavy Nasdaq has recovered after falling more than 10% below its record only two weeks earlier, as strong results from AI hyperscalers and some technology stocks revived enthusiasm for the AI trade.

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What Oil, Fed Pricing and AI Hardware Moves Signal

Why Oil’s Decline and Hormuz Tension Pull in Opposite Directions

Brent’s 1.9% drop after six winning sessions reflects two competing forces. Investors are weighing expectations of weaker global demand this year and higher U.S. oil inventories, but the market also faces a serious supply risk because traffic through the Strait of Hormuz remains heavily restricted and a senior Iranian source said Iran and the U.S. remain on a collision course over efforts to end the Middle East war. The price action suggests demand and inventory pressures are currently outweighing the geopolitical premium, but that balance can shift quickly.

What the PPI Release Means for Fed Pricing

The July producer price report is the next inflation data point for traders after consumer price figures came in favorable. If producer prices confirm easing pipeline inflation, the 66% market-implied probability of no Fed change may climb further. Conversely, an upside surprise could unwind some of the recent tech-led recovery by reviving fears that the Federal Reserve may have to act.

Cisco, Cerebras and the Split Personality of AI Hardware

Cisco’s 6% drop despite a better-than-expected fiscal 2027 revenue outlook shows the market has high expectations for AI networking, and a forecast that exceeds estimates without enough supporting detail is not enough. Cerebras Systems’ plunge of more than 18% after missing quarterly revenue, even after a 24% gain over the previous four sessions, points to intense valuation sensitivity in AI chip names.

What to Watch in Today’s US Market Session

  • Watch the July PPI release at 14:30 Dutch time; a softer-than-expected print could reinforce the 66% market probability of a Fed hold.
  • Track weekly jobless claims and Fed speakers Beth Hammack and Thomas Barkin later Thursday for any shift in the rate narrative.
  • For oil-exposed positions, follow Brent’s 1.9% pullback and any Strait of Hormuz headlines, since Iran-US statements have already been cited as a supply risk.
  • In AI hardware, note Cisco’s 6% drop and Cerebras’ 18% slide as a sign that earnings execution, not just revenue guidance, is being priced harshly.

Risk & Opportunity Assessment

Commercial RiskMediumFutures are modestly higher, but AI hardware names are showing sharp single-day moves: Cisco fell 6% despite a better-than-expected fiscal 2027 revenue forecast, and Cerebras fell more than 18% after missing quarterly revenue.
Competitive RiskMediumDell gained 4% and HP gained 1.8% following Lenovo’s stronger results, showing competitive read-across in PC hardware, while Cisco faces high AI networking expectations that can trigger downside even on positive guidance.
Regulatory RiskMediumThe Federal Reserve’s next rate decision remains the key policy variable; an upside surprise in July PPI at 14:30 Dutch time could challenge the 66% market probability of a hold and tighten financial conditions.
Reputation RiskLowCerebras Systems’ revenue miss and 18% decline after a 24% four-session run may raise credibility concerns, while Cisco’s sell-off despite positive guidance suggests investors are scrutinizing margin delivery rather than headline revenue.
Technology DisruptionMediumThe AI trade has revived the Nasdaq from more than 10% below its record two weeks ago, but Cerebras’ miss and Cisco’s negative reaction show that AI-linked valuations remain highly sensitive to earnings execution.
Commercial OpportunityMediumDell and HP are benefiting from Lenovo’s positive read-across, and broad earnings strength has kept the Dow and S&P 500 near record highs while the Nasdaq sits roughly 2% below its all-time high.