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Wall St. points to muted open as investors eye inflation data, Yellen

Investing.com -

Investing.com - U.S. stock markets pointed to a muted open on Wednesday morning, as investors looked ahead to a batch of key U.S. economic data and more comments from Federal Reserve Chair Janet Yellen for fresh catalysts.

The blue-chip Dow futures rose 14 points, or less than 0.1%, at 6:45AM ET (11:45GMT), the S&P 500 futures was flat, while the tech-heavy Nasdaq 100 futures was little changed.

U.S. equities closed higher on Tuesday, posting new record highs, led by a rally in Apple (NASDAQ:AAPL) and financial stocks (NYSE:XLF).

Market sentiment improved after Fed Chair Yellen sounded upbeat on the economy and left the door open to an interest rate hike at the central bank's March policy meeting.

In testimony to the U.S. Senate on Tuesday, Yellen said that waiting too long to raise interest rates would be "unwise" as economic growth continues and inflation rises.

Investors raised their outlook on a faster pace of U.S. rate increases following her comments. Fed fund futures priced in around a 20% chance of a rate hike in March, according to Investing.com's Fed Rate Monitor Tool, up from less than 10% at the start of the week. Odds of a June increase was seen at around 70%.

Yellen is scheduled to appear before the House of Representatives Financial Services Committee at 10:00AM ET (15:00 GMT) on Wednesday. The Fed has previously indicated that it could hike rates three times this year.

On the data front, the U.S. will publish January inflation figures at 8:30AM ET (13:30GMT) Wednesday. Market analysts expect consumer prices to ease up 0.3%, while core inflation is forecast to increase 0.2%.

On a yearly base, core CPI is projected to climb 2.1%. The Fed usually tries to aim for 2% core inflation or less. Rising inflation would be a catalyst to push the U.S. central bank toward raising interest rates.

At the same time, the U.S. will also publish data on January retail sales, amid expectations for a gain of 0.1% last month, after rising 0.6% in December.

Besides the inflation and retail sales reports, Wednesday's calendar also features the Empire State manufacturing survey, also at 8:30AM ET, industrial production at 9:15AM ET (14:15GMT) and business inventories at 10AM ET (15:00GMT). The National Association of Home Builders survey is also released at 10AM.

In addition, headlines from Washington will remain in focus as traders await further details on President Donald Trump's promises of tax reform, infrastructure spending and deregulation.

Trump will meet on Wednesday with the chief executives of eight large retailers, including Target (NYSE:TGT), Best Buy (NYSE:BBY) and J.C. Penney (NYSE:JCP), to discuss tax reform and infrastructure improvements, according to people with knowledge of the meeting.

Meanwhile, the Energy Department is scheduled to release its official weekly oil supply report at 10:30AM ET (15:30GMT) Wednesday, amid analyst expectations for a rise of 3.5 million barrels. The American Petroleum Institute said that U.S. oil inventories rose by a whopping 9.9 million barrels in the week ended February 10.

U.S. crude was down 36 cents, or 0.7%, to $52.85, while Brent slumped 30 cents to $55.67 a barrel.

In earnings news, PepsiCo (NYSE:PEP) is scheduled to report before the bell. Kraft Heinz (NASDAQ:KHC), Cisco (NASDAQ:CSCO) and CBS (NYSE:CBS) report after the bell.

Elsewhere, European stock markets were higher in mid-morning trade, with banks leading the gains after Yellen's hawkish comments sparked a rally in financial stocks.

Earlier, in Asia, markets ended mixed, with the Shanghai Composite in China closing down around 0.2%, while Japan's Nikkei climbed 1.1%.

In the currency market, the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.2% at 101.41 in early trade.

It rose to 101.50 earlier, its strongest level since January 20, in wake of Yellen's hawkish testimony.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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