US stock futures rise ahead of CPI data as Fed hike odds ease

US stock futures edged higher during European hours on Friday, recovering after Thursday's sell-off triggered by hotter-than-expected producer prices. Investors are now focused on the Consumer Price Index report, due later today, for clues on whether the Federal Reserve raises rates next week. CME FedWatch data puts the odds of a 25-basis-point hike at nearly 70%, down from 72%.

Bottom line — The US CPI report will likely settle whether the Fed hikes next week, with markets pricing a ~70% chance.

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• FXStreet reports that Dow Jones futures rose 0.46% to around 52,350, S&P 500 futures gained 0.44% to 7,630, while Nasdaq 100 futures slipped 0.45% to 29,260.
• Thursday's decline followed US producer price data for August: headline PPI rose 5.4% year on year, above the 5.3% forecast and up from 4.8% in July, according to FXStreet.
• A Reuters poll cited by FXStreet found most economists expect the Federal Reserve to hold rates steady through the rest of the year, despite firmer jobs data.
• Analysts at DBS note Fed officials were divided over whether to raise rates at next week's FOMC meeting, heading into the blackout period.
• Strategists at BNY Markets argue that if Fed guidance stays sparse and markets keep inferring policy from volatile data, elevated rate volatility should persist.

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