US pre-open: Futures higher ahead of CPI reading

Wall Street futures had stocks opening higher ahead of the opening bell on Tuesday as market participants looked ahead to a key inflation report.

As of 1215 GMT, Dow Jones futures were up 0.66%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.77% and 0.70% firmer, respectively.

The Dow closed 90.50 points lower on Monday even after president Joe Biden declared the US banking system to be 'safe' following the collapse of Silicon Valley Bank.

Tuesday's primary focus will be February's consumer price index at 1230 GMT, in which economists expect to see a rise of 0.4% last month, a slight decrease from a 0.5% increase recorded in January

Swissquote's Ipek Ozkardeskaya said: "The US CPI data due today could reshuffle the Fed expectations regarding what will happen next week. Both headline and core inflation are expected to have eased in February, but investors are cautious given that last month's disappointment could be repeated this month, as the base effect – where we will finally start comparing the war months to the war months won't be in play until March – as Russia invaded Ukraine by end of February last year.

"It could be another month of a challenging CPI read for the US. But the logic this time could be different than before last week. A CPI data in line, or ideally softer-than-expected could fuel the expectation of ‘no hike’ from the Fed this month, whereas a stronger-than-expected CPI figure may not fuel the expectation of a rate hike from the Fed, as many investors will be urging the Fed to stop hiking the interest rates and be patient about the impact on inflation that could come with delay."

On the macro front, the National Federation of Independent Business' small business optimism index increased to 90.9 in February, up from 90.3 in January and the highest reading in three months.

Still to come, Federal Reserve banker Michelle Bowman will deliver a speech at 2120 GMT.

In the corporate space, United Airlines shares slumped after the carrier slashed its first quarter guidance and said it expects to report a loss of $0.60-$1.0 per share of the period, while First Republic shares surged 20% as regional banks do their best to bounce back from the previous session's SVB-fuelled sell-off.

Reporting by Iain Gilbert at Sharecast.com