U.S. Stock Futures Advance Ahead of CPI and Bank Data

U.S. stock index futures rose on Wednesday as investors remained cautious ahead of key consumer inflation data and quarterly earnings reports from major banks.

Wall Street indices experienced a turbulent session on Tuesday, weighed down by persistent weakness in technology stocks. The indices have shown a lackluster start to the year, extending their decline from record highs reached in December.

The S&P 500 rose 0.1% and the Dow Jones Industrial Average gained about 0.5%, while the NASDAQ Composite fell 0.2%.

CPI Data to Provide Clarity on Rates

Investor attention now focuses on the release of consumer price index (CPI) inflation data, which is expected to shed more light on the Federal Reserve’s future interest rate decisions.

The CPI report, due today, is projected to show a 0.4% month-on-month increase in December, slightly higher than the 0.3% rise recorded in November. Year-on-year, the CPI is anticipated to reach 2.9%, up from 2.7% the previous month. Excluding volatile items like food and fuel, core CPI is expected to remain steady at 0.3% month-on-month and 3.3% year-on-year.

Persistent inflation remains a concern, particularly following last week’s strong employment data. Plans by President-elect Donald Trump to impose strict tariffs on both allies and adversaries have further fueled fears of rising price pressures.

Markets are positioning for a slower pace of interest rate cuts in 2025, a trend that could have adverse implications for risk assets. While Tuesday’s softer-than-expected producer price index (PPI) offered some relief, other inflation metrics, such as those influencing the Fed’s preferred PCE price index, remain elevated. The PCE data is set to be released at the end of the month.

Major Banks Set to Report Quarterly Results

In the corporate sector, several leading banks are scheduled to report their quarterly earnings on Wednesday. Investors are looking to these results for momentum amid a fading post-election stock market rally.

JPMorgan Chase (JPM), Goldman Sachs (GS), Citigroup (C), and asset management giant BlackRock (BLK) are among the institutions reporting. Key areas of focus include investment banking and trading revenues, which may have been bolstered by a stock market rally fueled by hopes for regulatory rollbacks and tax cuts following Trump’s election victory. Additionally, a reduction in corporate borrowing costs could contribute positively to earnings.

Oil Prices Gain on Lower U.S. Inventories

Oil prices climbed on Wednesday, supported by a decline in U.S. crude stockpiles and ongoing concerns over potential supply disruptions due to new sanctions on Russian exports.

Prices had dipped on Tuesday after the U.S. Energy Information Administration forecasted that oil supply would outpace demand over the next two years. However, the market found support after the American Petroleum Institute reported a drop in U.S. crude oil inventories late Tuesday, signaling robust demand in the world’s largest oil consumer.

Traders are also closely monitoring the impact of sanctions on Russian oil exports, which have introduced uncertainty about how much supply might be removed from the global market and whether alternative measures can compensate for the potential shortfall.