US stock index futures edged higher Wednesday, with investors cautious ahead of the release of key consumer inflation data as well as corporate earnings from major banks.
At 05:45 ET (10:45 GMT), S&P 500 Futures rose 83 points, or 0.2%, Nasdaq 100 Futures climbed 9 points, or 0.2%, and Dow Jones Futures gained 47 points, or 0.2%.
The Wall Street indexes suffered a choppy session on Tuesday amid persistent weakness in technology stocks. They were also nursing a weak start to the year after tumbling from record highs through December.
The S&P 500 rose 0.1% and the Dow Jones Industrial Average gained 0.5%, while the NASDAQ Composite fell 0.2%.
CPI data to offer more rate cues
The focus was now squarely on upcoming consumer price index inflation data, which is expected to provide more insight into the Fed’s plans for interest rates.
The reading is due at 08:30 ET, and economists estimate that the headline consumer price index increased by 0.4% month-on-month in December, slightly faster than a pace of 0.3% in the prior month. Compared to a year earlier, CPI is seen at 2.9%, up from 2.7% in November.
Stripping out items like food and fuel, the so-called “core” figure is projected to come in at 0.3% on a monthly basis and 3.3% year-on-year, matching November.
Heading into the report, concerns have swirled around nagging inflation, particularly after last week’s blockbuster employment data. President-elect Donald Trump’s plans to impose strict tariffs on allies and adversaries alike have also fueled the worries around price pressures.
Markets are positioning for a much slower pace of interest rate cuts in 2025 - a trend that could bode poorly for risk-driven assets.
The December producer price index, released on Tuesday, was softer than expected, but the print provided little relief to markets, given that some measures of inflation, which also factor into PCE price index data, remained high.
PCE data is the Fed’s preferred inflation gauge, and is due later in the month.
Major banks to report quarterly results
In the corporate sector, a number of major banks are due to report their latest quarterly returns on Wednesday, with investors eyeing them as a potential source of life for a waning post-election stock market rally.
JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), and Citigroup (NYSE:C), as well as asset management giant BlackRock (NYSE:BLK), are set to announce their numbers prior to the opening bell on Wednesday.
Investment banking and trading revenues will likely be a focal point, especially following a surge in stocks after Trump's election victory that was fueled by hopes on Wall Street for a new era of looser regulations and lower taxes. A dip in corporate borrowing costs could buoy top-line results as well.
Crude boosted by US inventory draw
Oil prices edged higher Wednesday, helped by a drop in US crude stockpiles as well as fears that new sanctions on Russian oil exports will disrupt global supplies.
By 05:45 ET, the US crude futures (WTI) rose by 0.3% to $76.61 a barrel, while the Brent contract added 0.2% to $80.08 per barrel.
Prices slipped on Tuesday after the US Energy Information Administration predicted oil would come under pressure over the next two years as supply would outpace demand.
That said, the market has found some support from a report from the American Petroleum Institute late Tuesday that showed a decline in crude stockpiles in the US, the world's biggest oil consumer.
Traders also continue to focus on the Russian oil sanctions, amid uncertainty around how much Russian supply will be lost in the global market and whether alternative measures can offset the shortfall.
