Wall Street points to a higher open ahead of critical July inflation data

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NEW YORK (AP) — U.S. futures are pointing higher before the release of key inflation data for July that could provide a better idea of where prices are heading.

Futures for the S&P 500 gained 0.3% Wednesday and futures for the Dow Jones Industrial Average edged up 0.1%. Nasdaq futures gained 0.7%.

Rising costs are being closely watched by the Federal Reserve as well as Republicans facing tough midterm elections and millions of Americans struggling with higher prices for everything from groceries to gasoline. Economists expect new data to show to show inflation slipped to 3.4% in July from 3.5% in June.

Cooler inflation could relieve pressure on the Fed to raise interest rates. Higher rates could curb inflation also would drag on the overall U.S. economy by making it more expensive for households and businesses to borrow money. Higher rates also would undercut prices for stocks and other investments.

Shares of cloud computing company CoreWeave surged more than 18% and Super Micro Computer's stock jumped nearly 9% before the market opened on strong quarterly results. CoreWeave more than doubled its revenue as customer demand accelerated in the second quarter. The strong earnings gave a boost to other companies involved in building the physical infrastructure of artificial intelligence data centers including Coherent Corp., Lumentum Holdings and Marvell Technology.

Oil prices are essentially flat Wednesday but sharply higher this week with the Strait of Hormuz, through which a fifth of the global oil supply runs, effectively shut down as fighting in Iran continues.

The price of a barrel of Brent crude, the international standard, rose 0.19% to $89.08 early Wednesday. U.S. benchmark crude oil ticked up 0.4% to $83.53.

U.S. gasoline prices also edged 2 cents higher over night to a national average of $4.04 per gallon, according to motor club AAA. That's 16 cents higher than at this point last month.

U.S. President Donald Trump said he would seek compensation from Iran for the conflict after Tehran said it would seek payments from the U.S. before it opens the strait.

Meanwhile an attack by Iran-backed Houthi rebels on a vessel in the Bab el-Mandeb strait at Yemen's southern tip has raised concerns that the violence could reignite civil war and further threaten regional shipping routes.

“The renewed hostilities between the US and Iran suggest that a long-term reduction in shipping through the Strait of Hormuz is now the most likely scenario,” said Ben May, director of global macro research at Oxford Economics.

Treasury yields have jumped since the war with Iran because of higher oil prices and worries about inflation. That has sent long-term mortgage rates to their highest levels in a year.

In early European trading, Germany’s DAX rose 0.47% to 26,514.56, while the CAC 40 in Paris fell 0.12%, to 8,705.08. Asian trading was mixed.

The U.S. dollar slipped to 159.16 Japanese yen from 159.22 yen. The euro was down slightly at $1.1537.

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AP Business Writer Elaine Kurtenbach reported from Bangkok