U.S. stock index futures inched up on Tuesday as signs of progress toward reopening the Strait of Hormuz weighed on oil prices, though the inflation outlook remained uncertain.
Talks between Oman and Iran over shipping in the crucial waterway were now in an advanced stage, Qatar's foreign ministry spokesperson said. This comes a day after an exchange of demands between the United States and Iran complicated efforts to reopen the strait.
Brent crude futures LCOc1 turned negative, after gaining 2% to cross one-week highs earlier in the session. Rising energy costs have spurred inflation concerns and chances of increased interest rates around the world.
Consumer and producer price inflation readings later this week might shape market expectations on the U.S. Federal Reserve's policy path, given its focus on the inflation mandate and Chair Kevin Warsh's stance on cutting back forward guidance on rates.
Whether the central bank would increase rates in September or choose to pause has split traders almost evenly, according to the CME FedWatch Tool.
"The July CPI report will help make the case for or against a September rate hike — not just whether it surprises by a tenth either way, but whether the divergence between CPI and the core PCE gauge begins to narrow," said Laura Cooper, global investment strategist and head of macro credit at Nuveen.
At 7:20 a.m. ET, Dow E-minis YMcv1 were up 27 points, or 0.05%, S&P 500 E-minis EScv1 were up 11.75 points, or 0.15%, and Nasdaq 100 E-minis NQcv1 were up 103.75 points, or 0.35%.
Wall Street's main indexes closed lower on Monday as investors assessed the Middle East situation, though the S&P 500 .SPX and the Dow .DJI hovered near all-time highs.
The Nasdaq .IXIC, meanwhile, is about 2.1% below its life-high but well above its lows in July, when the tech-heavy index slid almost 10% from its peak.
Strong quarterly earnings in several sectors have boosted U.S. stocks to new highs and signs of AI-related spending paying off has eased some jitters.
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