US pre-open: Futures in the green ahead of CPI reading

Wall Street futures had stocks opening in the green ahead of the bell on Wednesday as market participants awaited the publication of key inflation data scheduled for later on in the day.

As of 1215 BST, Dow Jones futures were up 0.86%, while S&P 500 and Nasdaq-100 futures had the indices opening 1.09% and 1.37% higher, respectively.

The Dow closed 84.96 points lower on Tuesday in what was a mixed session for major indices.

Wednesday's primary focus will be April's consumer price index, slated for release at 1330 BST, as investors look to get an update on the inflationary environment amid rising prices and moves by the Federal Reserve to hike interest rates and trim its balance sheet. Economists expect to see CPI rising 0.2% month-on-month and 8.1% year-on-year, a slight deceleration when compared to March's 8.5% annual pace.

Markets.com's Neil Wilson said: "All eyes today are on the US CPI inflation print. Headline CPI in March rose by 8.5% from a year before, the fastest annual gain since December 1981. Core inflation, excluding food and energy, rose 6.5%. Today's print is expected to be similarly high, but will it show signs of cooling or heating? The Fed raised rates by 50bps last week and was relatively cautious as it played down speculation for larger increases over the coming months.

"If inflation continues to build, the Fed may need to up its pace and this could leave stocks in danger of further selling pressure. Forecasts from the big banks indicate deceleration in inflation, with CPI dropping closer to 8%, which would certainly be a relief for risk assets."

In other macro headlines, US mortgage applications rose 2% in the week ended 6 May, according to the Mortgage Bankers Association of America, up from the previous week's 2.5% increase.

Still to come, the Federal Government's April budget statement will be published at 1900 BST.

Turning to corporate news, Alibaba and Wendy's will report earnings prior to the open, while Beyond Meat, Walt Disney, and Sonos were all scheduled to release their latest quarterly figures after the close.

Reporting by Iain Gilbert at Sharecast.com