* Futures up: Dow 1.30%, S&P 1.73%, Nasdaq 2.36%
Aug 10 (Reuters) - Wall Street was set to open sharply
higher on Wednesday after data showed a slower-than-expected
rise in inflation last month, reducing bets on super-sized rate
hike in September.
U.S. annual consumer prices slowed to 8.5% in July.
Economists polled by Reuters expected the Consumer Price Index
to show year-on-year headline inflation of 8.7%, far above the
Federal Reserve's target of 2%, but lower than last month's
Core inflation remained unchanged month-on-month at 5.9%,
while economists were expecting a rise to 6.1%.
The market is now pricing in 33.5% chance of a 75 basis
point increase in fund rates at the Fed's next meeting in
September, compared with 67.5% before the data.
At 8:41 a.m. ET, Dow e-minis were up 424 points, or
1.3%, S&P 500 e-minis were up 71.5 points, or 1.73%, and
Nasdaq 100 e-minis were up 307.25 points, or 2.36%.
After a rough start to the year, the benchmark S&P 500
is up nearly 13% from its mid-June low, largely on
expectations the Fed will be less hawkish than anticipated in
its efforts to provide a soft landing for the economy.
(Reporting by Bansari Mayur Kamdar, Aniruddha Ghosh and Medha
Singh in Bengaluru; Editing by Arun Koyyur and Anil D'Silva)