U.S. stock futures edged higher Wednesday, as investors digested a cooler than expected inflation report ahead of the release of retail sales data and earnings from major retailers.
By 06:35 ET (11:35 GMT), the Dow Futures contract was up 100 points, or 0.3%, S&P 500 Futures traded 16 points, or 0.4%, higher and Nasdaq 100 Futures climbed 84 points, or 0.5%.
The main indices on Wall Street closed sharply higher Tuesday after data showed price growth in the world’s largest economy had slowed by more than expected last month, boosting hopes that the Fed’s unprecedented run of interest rate hikes aimed at corralling elevated inflation may have peaked.
The 30-stock Dow Jones Industrial Average added almost 500 points, or 1.4%, while the benchmark S&P 500 gained 1.9% and the tech-heavy Nasdaq Composite rose 2.4%, the best day since April for both indices.
U.S. retail sales in spotlight
Top-line U.S. inflation came in flat last month, an annual rise of 3.2%, against consensus expectations for a 0.1% rise on the month, up 3.7% on an annual basis.
This offered further evidence that U.S. inflationary pressures are cooling, and expectations that the Fed could now cut rates next year increased, with the chance of a reduction in March now standing at around 30%.
There’s more inflation data due later Wednesday, with producer prices expected to have risen 1.9% in October from last year, slowing from a 2.2% increase in September.
Investors will also look to the October retail sales release, later in the session, with a drop of 0.3% on the month forecast, as consumers continue to struggle. That said, a strong reading could dampen the exuberance over rate cut expectations.
Target’s outlook to offer guidance
On the corporate side of the equation, Target (NYSE:TGT) is due to publish its third-quarter results, in a release that could provide a fresh glimpse into the outlook for consumer spending heading into the crucial holiday shopping season.
The likes of JD (NASDAQ:JD), Advance Auto Parts (NYSE:AAP) and TJX (NYSE:TJX) are also slated to report earnings Wednesday, while Walmart (NYSE:WMT) and Macy’s (NYSE:M) are scheduled to release their results on Thursday.
Oil slips ahead of EIA inventories
Oil prices slipped lower Wednesday, handing back some of the previous session’s gains ahead of the latest release of U.S. crude inventories.
By 06:35 ET, the U.S. crude futures traded 0.7% lower at $77.75 a barrel, while the Brent contract dropped 0.5% to $82.03 a barrel.
The U.S. Energy Information Administration will release its first oil inventory report in two weeks later in the session, after a systems upgrade last week. Industry data from the American Petroleum Institute released on Tuesday pointed to a weekly build of just over one million barrels in inventories.
Additionally, gold futures rose 0.6% to $1,977.30/oz, while EUR/USD traded 0.2% lower at 1.0861.
