By Peter Nurse
Investing.com -- U.S. stocks are seen opening higher Wednesday, with investors digesting the latest consumer inflation report as the quarterly earnings season starts in earnest.
At 7 AM ET (1100 GMT), the Dow Futures contract was up 160 points, or 0.5%, S&P 500 Futures traded 23 points, or 0.5%, higher and Nasdaq 100 Futures climbed 100 points, or 0.7%.
The major indices are down sharply this week, and year to date, on concerns that soaring inflation will cause the U.S. Federal Reserve to aggressively tighten monetary policy, potentially causing a slowdown in growth.
Data released on Tuesday showed the highest U.S. consumer inflation since late 1981, however, there was a small glimmer of hope that price pressures may have peaked, as core CPI, which excludes volatile energy and food prices, came in below expectations.
The Federal Reserve is widely expected to hike interest rates by 50 basis points when it next meets in May, while also starting to cut back its $9 trillion balance sheet. But the core data raised the possibility that the central bank might not need to be as aggressive in the second half of this year as originally expected.
The benchmark 10-year U.S. Treasury yield traded at 2.756% Wednesday, falling back from the over-three-year peak of 2.836% seen before the inflation data.
The March producer price index is due at 8:30 AM ET, with analysts expecting the annual figure to climb 10.6%, growing 1.1% on the month.
Additionally, the companies of the S&P 500 are set to start reporting earnings, with JPMorgan (NYSE:JPM) and Delta Air Lines (NYSE:DAL) starting the ball rolling before the open Wednesday.
Banks are seen as beneficiaries of a rising rate environment, but market volatility could dampen capital markets and investment banking activity for the big Wall Street firms, while Delta forecasts a profit in the second quarter as surging volumes and prices more than made up for rising costs.
Oil prices traded higher Wednesday, continuing the previous session’s hefty gains amid concerns of Russian supply being further reduced, and helped by signs the lockdown of Shanghai and other regions of China may soon be at least partially lifted.
Russian President Vladimir Putin's comments that peace talks had come to a dead end have raised fears that the European Union could embargo Russian crude to further punish Moscow.
U.S. crude stockpiles rose by 7.8 million barrels last week, according to data from the American Petroleum Institute released Tuesday, but gasoline inventories fell by 5 million barrels, an indication of strong U.S. fuel demand.
The official crude oil supply data from the EIA is due later in the day.
By 7 AM ET, U.S. crude futures traded 1.3% higher at $101.89 a barrel, while the Brent contract rose 1.4% to $106.11. Both benchmarks climbed more than 6% in the previous session.
Additionally, gold futures rose 0.1% to $1,978.40/oz, while EUR/USD traded largely flat at 1.0826.