US pre-open: Stocks seen mostly higher ahead of more inflation data

US stock futures pointed to a mostly higher open on Wall Street on Thursday as investors eyed another inflation reading.

At 1220 BST, Dow Jones Industrial Average futures were down 0.1%, but S&P 500 and Nasdaq futures were 0.2% firmer.

James Harte, market analyst at TickMill Group, said: "Following on from yesterday’s CPI reading, traders will today turn their focus to the latest US PPI reading. Rate hike expectations for June have fallen sharply on the back of yesterday’s softer-than-forecast US CPI data. Pricing for a further 0.25% hike now sits below 10%, down from around 20% ahead of the data.

"In light of the weakness in CPI, traders are looking for a similarly soft reading today which should keep stocks well supported on the view that the Fed is likely to keep rates on hold at the next meeting."

He added that tech stocks in particular have been well supported amidst the shift in outlook for the Fed.

"The Nasdaq was seen rallying over 1% yesterday, hitting fresh highs for the year as traders digested the latest US inflation data. If today’s data confirms a further fall in PPI, particularly if readings are weaker-than-forecast, this should create ample room for a fresh rally in tech stocks today."

Harte said the market is projecting core PPI at 0.2%, up from the prior month’s -0.1% reading along with headline PPI at 0.3%, up from the prior month’s -0.5% reading.

"If these increases are confirmed, the impact will likely be fairly muted on stocks though an undershooting of these forecasts should see stocks rallying firmly into the end of the week."

The producer price index for April is due at 1330 BST, along with the latest jobless claims data.

On the corporate front, Disney was set to be in focus after the release of its second-quarter earnings on Wednesday.

Victoria Scholar, head of investment at Interactive Investor, said the earnings broadly met analysts’ expectations on the top and bottom line.

"However Disney+ streaming subscribers fell by 4 million, hitting 157.8 million versus expectations for 163.17 million, sending shares down almost 5% after-hours," she said. "Investors shrugged off a stronger performance in its parks, experiences and products division which enjoyed 17% revenue growth to $7.7 billion, mostly thanks to strong sales in its theme parks."