The Labor Department report, due 8:30 a.m. ET, is expected to show consumer prices rose at a slower pace in April, cooling 0.2% in April from 1.2% in March.
After the 50 basis point hike in rates by an increasingly belligerent Federal Reserve, markets have been swinging wildly ahead of this week’s data, which will be closely watched for signs of a spike in the economy. inflation.
Recent comments from Fed officials have backed a series of half-percentage-point rate hikes, though traders see a 73% chance the central bank will hike 75 basis points at the Fed meeting. June.
“A soft inflation reading will be a relief that the Federal Reserve’s efforts to bring inflation under control have begun to bear fruit, and that the Fed doesn’t need to be much more aggressive in bringing inflation back towards its policy target of 2%,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“If, however, inflation has not come down as expected – and worse, if we see a higher reading than last month’s print, we would see another big wave of selloff across all assets.”
The tech-heavy Nasdaq closed higher on Tuesday but remains close to an 18-month low hit earlier this week after mega-capital growth stocks fell sharply on concerns that rising rates affects future cash flows.
As of 6:59 a.m. ET, the Dow e-minis were up 267 points, or 0.83%, the S&P 500 e-minis were up 44 points, or 1.1%, and the Nasdaq 100 e-minis were up 178.5 points, or 1.45%.
Offering support to equities, US Treasury yields continued their decline from recent highs, with the yield on 10-year bonds slipping below 3%. [US/]
High-growth stocks such as Tesla Inc, Amazon.com, Microsoft Corp, Meta Platforms, Apple Inc and owner of Google-Alphabet Inc gained between 1.6 and 2% in pre-market exchanges.
Coinbase Global Inc fell 13.9% after first-quarter earnings missed estimates amid turbulence in global markets that dampened investors’ appetite for risky assets.