US pre-open: Stocks to edge higher ahead of inflation reading; Qualcomm slumps
US futures pointed to a slightly firmer open on Wall Street on Tuesday as investors eyed a key reading on inflation.
At 1120 GMT, Dow Jones Industrial Average and S&P 500 futures were up 0.2%, while Nasdaq futures were 0.1% higher.
Craig Erlam, senior market analyst at Oanda, said: "The next 24 hours will be of particular interest to traders in what is otherwise expected to be a relatively quiet week, with US inflation and retail sales data in focus.
"Today’s inflation release - while not being the Fed’s preferred measure - will offer some insight into the direction of travel for US prices at a time when the labour market is tight and tax reform is providing an additional stimulus. As we saw on Friday though, there may be more slack in the labour market than the central bank was factoring in and so traders and policy makers will be looking at wages and inflation data for clear signs that the data is confirming their forecasts.
"I’m not sure a slight uptick in inflation to 2.2% and core inflation remaining at 1.8% will provide policy makers with much comfort or confidence next week but they may be encouraged that it is at least headed in the right direction. A miss on the other hand, on top of Friday’s report, may give policy makers reason to hold up on revising up interest rate expectations next week, which could weigh on the dollar and support stocks in the near-term."
The consumer price index for February is due at 1230 GMT. Ahead of that, investors were digesting news that small businesses in the US were at their most optimistic in 35 years in February. The National Federation of Independent Business index of activity and sentiment rose to 107.6 from 106.9, beating expectations for a reading of 107.1.
"When small business owners have confidence and certainty in the economy, they’re able to hire more workers and invest in their business," said NFIB president and CEO Juanita Duggan. "The historically high readings indicate that policy changes – lower taxes and fewer regulations - are transformative for small businesses. After years of standing on the sidelines and not benefiting from the so-called recovery, Main Street is on fire again."
On the corporate front, Qualcomm slumped 5% in pre-market trade after President Trump blocked Broadcom's hostile $140bn bid for the chip company on the grounds of national security. Trump said there is "credible evidence" that the deal "threatens to impair the national security of the US" amid concerns it would have given China the upper hand in mobile communications.
United Continental was in the black after the airline said it was targeting 2018 adjusted earnings per share of between $6.50 and $8.50 versus consensus expectations of $7.46.
Footwear retailer DSW was on the back foot, however, after its fourth-quarter revenue missed expectations.
Elsewhere, online clothing retailer Stitch Fix could be in focus after its second-quarter earnings release late on Monday.