Michigan one-year inflation expectations climbed above 4% for a fifth month, while the US-Iran ceasefire expires today with Hormuz talks still stalled. Despite softer inflation, consumer sentiment, and retail sales data, the probability of a September Fed hold has risen to 67% from below 50% a month ago.

The Dollar Index fell for a third session to around 99.5 as softer US data reduced Fed hike expectations. The probability of a September hold now stands near 67%, compared with below 50% a month ago. 

US stock futures edged higher as attention shifted to earnings from Home Depot, Lowe’s, and Walmart. Wednesday’s Fed minutes are also in focus after softer inflation reduced September hike expectations. The S&P 500 and Nasdaq have gained for three straight weeks, helped by strong earnings despite Middle East and AI concerns.

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