Stock futures shot higher on Wednesday ahead of data that could show U.S. inflation has started to cool from four-decade highs, while news of easing COVID cases in China also spelled some relief for investors.
How are stock-index futures trading?
S&P 500 futures
rose 45 points, or 1.1%, to 4,042
Dow Jones Industrial Average futures
climbed 290 points, or 0.9%, to 32,376
Nasdaq 100 futures
jumped 175 points, or 1.4%, to 12,526
On Tuesday, the Dow industrials
fell 0.3% to close at 32,160.74, a fourth straight day of losses that marked its largest four-day percentage decline since the stretch ending Oct. 29, 2020. The S&P 500
snapped a three-day losing streak with a gain of 0.2%, while the Nasdaq Composite
What’s driving markets?
Futures were climbing as investors awaited the most important data point of the week — April consumer prices, which are expected to have climbed 8.1% annually from 8.6% the previous month, according to a survey of economists by Dow Jones and The Wall Street Journal.
It would mark the first time in five months the index hasn’t climbed at the fastest rate in 40 years. Core prices are due to rise 0.4% from a 0.3% gain in March, when the data is released at 8:30 a.m. Eastern Time.
The data could be “make or break” for what has been volatile stock markets, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, told clients in a note.
A soft inflation read would bring relief on the view the Federal Reserve’s efforts to tame inflation are working and don’t need to get more aggressive, she said.
“In which case, a couple of 50-bp hikes and the announced balance sheet reduction should suffice to deal with inflation and cool the hawkish Fed expectations,” said Ozkardeskaya.
“If however, inflation hasn’t pulled lower as expected — and worse, if we see a higher figure than last month’s print, we would see another big wave of selloff across all assets, as a persistent rise in inflation from the actual levels would get investors to bet for a 75-bp hike from the Fed in a next meeting,” said the analyst.
The federal budget for April is due at 2 p.m. Eastern Time.
Some positive sentiment could also be fueled by reports that COVID cases were easing in Beijing and Shanghai, driving hopes for an easing of restrictions and pressure on the global economy. Optimism that that could relay to improved demand helped drive oil prices sharply higher.
Separately, data showed China’s consumer-price index rose 2.1% in April from a year earlier, picking up from March’s 1.5% increase.
As stock futures rose, Treasury yields fell, with that of the 10-year note
down 6 basis points to 2.936%.
The U.S. dollar
was weaker, notably against the euro
after European Central Bank President Christine Lagarde said the first interest rate increase in the bloc could come weeks after the end of the central bank’s bond-buying program.
Big earnings news in focus after the close of markets will fall on The Walt Disney Co.
whose shares rose 1% in premarket trade. Investors will be taking a close look at the entertainment giant’s streaming service in particular, after rival Netflix
reported slumping subscriber numbers last month.
Which companies are in focus?
How are other assets trading?
Oil futures surged, with the U.S. benchmark
up $4 , or 4%, to $103.79 a barrel, with Brent crude
up nearly $4, or 3.8%, to $106.39 a barrel.