US pre-open: Stocks little changed ahead of CPI reading

Wall Street futures were little changed ahead of the bell as market participants awaited the release of March's all-important consumer price index later in the day.

As of 1220 BST, Dow Jones futures were up 0.11%, while S&P 500 and Nasdaq-100 futures were 0.03% and 0.01% firmer, respectively.

The Dow closed 9.13 points lower on Tuesday as investors looked ahead to today's CPI reading.

Wednesday's primary focus will be the inflation data, due at 1330 BST, with the reading likely to dictate how the Federal Reserve Bank approaches interest rate policy. Economists expect an increase of 0.3% month-on-month and 3.4% year-on-year. Core CPI, which strips out volatile food and energy prices, was seen 0.3% and 3.7% higher, respectively.

Hotter-than-expected inflation numbers may result in a sharp pullback in stock markets, while a cooler print could see Treasury yields ease off.

Scope Markets' Joshua Mahony said: "US inflation looks to provide a significant hurdle for markets today, with expectations of an uptick in headline CPI signalling the growing likeliness that we will see the Fed push back against expectations of a June rate cut. The optimists will look towards the likely decline in core inflation as a signal that underlying price pressures continue to ease, with a decline from 3.8% to 3.7% expected.

"However, the Federal Reserve are clearly under no pressure to act immediately, and the recent rise in energy prices do pose a significant risk that the gains seen today may not be a one-off. Between a strong US economy, strong jobs, and elevated inflation rate, there is little surprise that we are seeing markets gradually temper their expectations for a June rate cut from the Fed."

Elsewhere on the macro front, minutes from the Federal Open Markets Committee's latest policy meeting will be published at 1900 BST, with traders likely to thumb through the notes in search of any clues as to the central bank's thought process moving forward.

In the corporate space, Delta shares flew higher on the back of solid first-quarter earnings that came in ahead of expectations, while WD-40 traded lower after falling short of revenue forecasts for the second quarter.

Reporting by Iain Gilbert at Sharecast.com