Investing.com - U.S. stock futures stay close to the flatline on Wednesday ahead of the publication of an all-important inflation measure. Annualized consumer price growth is projected to equal the prior month's rate in January, which could bolster Federal Reserve Chair Jerome Powell's statement to a Congressional committee this week that the central bank is in no rush to roll out more interest rate cuts. Elsewhere, U.S. President Donald Trump's team is reportedly preparing to introduce sweeping reciprocal tariffs that would further ratchet up international trade tensions.
1. Futures muted
U.S. stock futures were subdued on Wednesday as traders looked ahead to the release of crucial inflation data and kept an eye on developments around President Trump's tariff plans.
By 03:32 ET (08:32 GMT), the Dow futures contract had edged down by 30 points or 0.1%, S&P 500 futures had fallen by 4 points or 0.1%, and Nasdaq 100 futures were mostly unchanged.
The main averages on Wall Street ended Tuesday in mixed fashion, with fresh interest rate commentary from Federal Reserve Chair Jerome Powell hovering over sentiment. In the first of two days of testimony before Congress, Powell said the Fed was in no hurry to resume slashing rates after a series of cuts last year, partly citing indications of broad resilience in the American economy.
In individual stocks, shares in Coca-Cola (NYSE:KO) rose after the beverage maker reported better-than-anticipated fourth-quarter revenue growth thanks to higher prices and an unexpected increase in case volume. Meanwhile, Apple (NASDAQ:AAPL) jumped on a report that it was partnering with Alibaba (NYSE:BABA) to develop artificial intelligence capabilities for iPhones in China, and Tesla (NASDAQ:TSLA) fell following media reports that CEO Elon Musk was leading a consortium of investors in a multi-billion takeover bid for ChatGPT-maker OpenAI.
2. Inflation data looms large
Markets are gearing up for the publication of a key monthly reading of U.S. inflation on Wednesday, which could factor into how the Fed approaches monetary policy decisions this year.
Economists estimate that headline consumer prices grew at a rate of 2.9% year-on-year in January, matching December's pace, while the gauge is tipped to slow to 0.3% from 0.4% on a monthly basis.
The so-called core measure, which strips out volatile items like food and fuel, is seen slowing slightly to 3.1% from 3.2%, but quickening to 0.3% from 0.2% month-on-month.
Inflation has slowed steadily since a post-pandemic surge, although Fed officials have noted that price growth remains above the central bank's 2% target level.
3. Potential Trump reciprocal tariffs in focus
Trump's advisers were finalizing plans to roll out sweeping reciprocal tariffs on Wednesday, according to Reuters.
The levies would be the latest salvo in Trump's attempt to impose a more protectionist, transactional relationship between the U.S. and its foreign trading partners -- a policy shift that has fueled worries over an impending global trade war.
Earlier this week, Trump unveiled fresh 25% tariffs on all steel and aluminum imports, sparking condemnation from the European Union, Canada and Mexico. Companies exposed to the duties raced to adjust their operations before the levies take effect in March, although the move was welcomed by some American workers and firms.
Previously, Trump slapped an additional 10% tariff on Chinese goods, a move which led to countermeasures from Beijing that are coming into effect this week. Trump also placed 25% tariffs on Mexico and Canada, but later postponed them for one month after he received promises from the two countries to tighten border security.
4. Cisco earnings ahead
Cisco Systems (NASDAQ:CSCO) is due to report its quarterly earnings after the closing bell on Wednesday, with analysts on the lookout for developments around artificial intelligence-powered demand for the group's networking gear.
Healthcare company CVS Health (NYSE:CVS) and electronic trading platform Robinhood (NASDAQ:HOOD) are also expected to post returns, as a deluge of corporate results begins to ebb.
Analysts at Vital Knowledge noted that corporate reports for the quarter ended in December are largely finished, with much of the focus now shifting to those periods ending January. Along with Cisco, investors will be monitoring numbers from AMC Entertainment (NYSE:AMC) and Walmart (NYSE:WMT) next week and, crucially, AI-darling Nvidia (NASDAQ:NVDA) later in the month.
5. Oil slips
Oil prices edged lower Wednesday, retreating from a two-week high as an industry report pointed to an unexpected surge in U.S. crude stockpiles, weighing on sentiment.
By 03:33 ET, the U.S. crude futures (WTI) slipped 1.0% to $72.59 a barrel, while the Brent contract fell 0.9% to $76.33 a barrel.
The declines snapped a three-day streak of gains for prices, which had seen prices climb to a two-week high.
U.S. crude oil inventories saw a massive surge last week, rising by 9 million barrels for the week ending January 31, according to the latest data from the American Petroleum Institute.