US pre-open: Futures cautiously higher ahead of CPI reading
Wall Street futures were slightly higher ahead of the bell on Wednesday as investors braced for some hotly anticipated inflation data.
As of 1210 BST, Dow Jones futures were up 0.22%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.13% and 0.03% firmer, respectively.
The Dow closed 98.27 higher on Tuesday, building upon gains recorded in the previous session.
Wednesday's primary focus will be on March's all-important consumer price index, slated for release at 1330 BST, with economists expecting to see CPI rise by 0.2% last month, down from the previous month's 0.04% increase. The CPI reading is the Federal Reserve's preferred inflation gauge and the outcome of the report may very well affect the central bank's thinking come rate decision time at the next FOMC meeting.
Zaye Capital's Naeem Aslam said: "Investors remain wary to support riskier assets ahead of the week's most crucial economic reading: the US CPI figure. It is generally expected that if the inflation figure remains persistent, the American equities market would suffer a major fall today. The Fed has been working hard to keep inflation under control, and they have raised interest rates in the face of a serious danger, the US financial crisis.
"Traders fear that if US inflation does not improve significantly, the S&P 500 might fall by 2% today. Considering that the S&P 500 is trading quite near to its 50-day SMA on a daily chart, a break below this moving average would simply exacerbate the selling impact."
Elsewhere on the macro front, US mortgage applications rose 5.3% in the week ended 31 March, according to the Mortgage Bankers Association of America, bouncing back from the prior week's 4.1% drop. Applications to purchase a home surged 7.8%, while those to refinance a home loan rose just 0.1%.
Still to come, minutes from the Federal Open Markets Committee's most recent meeting will be released at 1900 BST, as will the Federal Government's monthly budget statement.
No major corporate earnings were slated for release on Wednesday but quarterly figures from the likes of JPMorgan Chase, Wells Fargo and Citigroup will be published before the end of the week, the first updates since panic spread through the banking sector just last month.
Reporting by Iain Gilbert at Sharecast.com