Stock futures inched higher ahead of inflation data that will be closely watched for clues about the outlook for central-bank policy and the wider economy.
Futures for the S&P 500 added 0.2% Wednesday,a day after the benchmark stocks index fell 0.9% in its third consecutive day of losses. Dow Jones Industrial Average futures rose 0.1%. Contracts for the technology-focused Nasdaq-100 gained 0.3%.
VIX rose 0.18% while VIXmain fell 0.69% separately.
The price of gold slightly rose 0.2% to around $1,728.4 a troy ounce.
Investors are laser-focused on U.S. inflation data for June, due to be released at 8:30 a.m. ET. The fastest pace of consumer-price growth in four decades has upended financial markets this year by pushing the Federal Reserve to raise interest rates at a rapid clip.
The end of the central bank’s pandemic-era stimulus policies has dragged on the stock market, boosted yields on government and corporate bonds and sent the dollar higher. More recently, the Fed’s drive to tighten monetary policy has raised concerns of a looming recession.
“The inflation data look close to a peak in most of the major economies,” saidPaul O’Connor, head of multiasset at Janus Henderson Investors. “But I think the central banks are going to want to see much more than that before they give the all clear.”
The consumer-price index is expected to have increased 8.8% in June from the same month last year, according to economists surveyed by The Wall Street Journal. That would mark an acceleration from the 8.6% recorded in May. Core inflation, which strips out volatile food and energy prices, is expected to slow to 5.7% from May’s 6% rate.
Before the report, yields on 10-year U.S. government bonds edged up to 2.961% from 2.958% Tuesday. Yields move inversely to bond prices. They have fallen since late June on expectations that the Fed will cut rates in 2023 after a slowdown in the economy. In one sign of wariness about the economy, yields on two-year Treasurys are above those on 10-year notes, a pattern known as an inverted yield curve.
Delta Air Lines shares dropped 2.9% premarket after it said strong demand helped it turn a profit during the second quarter, though expenses also climbed.
Industrial supplier Fastenal is due to report quarterly results before the opening bell. Earnings season will pick up pace Thursday when the nation’s biggest banks begin to report.
Falling prices for commodities such as oil, grains and industrial metals in recent weeks could be a sign that inflation is starting to ease. Some retailers meanwhile are offering discounts to shed unwanted inventory.
But even if inflation does start to relent, investors expect the Fed to keep raising interest rates and unwinding its bond-purchase program this year. The central bank’s focus, Mr. O’Connor said, is to make sure workers and companies don’t begin to expect inflation to become entrenched—a dynamic that economic theory suggests could become self-reinforcing.
Oil prices recovered some ground after tumbling more than 7% Tuesday as investors bet that an economic downturn will weigh on fuel demand. Brent-crude futures edged up 0.6% to $100.05 a barrel. They are 18% lower than a month ago, a decline that has fed through to lower gasoline prices at the pump. The International Energy Agency said the crisis in oil supplies appears to be easing, pointing to a slowdown in demand and rising output in North America.
The WSJ Dollar Index, which tracks the U.S. currency against a basket of others, was flat. The euro held steady at $1.0039, trading close to parity against the dollar for the first time since 2002. Many investors are gloomy about the outlook for the eurozone as the war in Ukraine threatens the continent’s supplies of natural gas, a vital fuel for heating and power generation.
International markets were mixed. Losses for auto and insurance stocks pushed the Stoxx Europe 600 down 0.7%. Airline stocks including British Airways owner International Consolidated Airlines Group came under further pressure from the industry’s travails in coping with a revival in air travel.
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