U.S. Stocks May Open Higher Following Tame Inflation Data

Stocks are likely to move to the upside in early trading on Wednesday, extending the tech-led rally seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 171 points.

The futures jumped following the release of a Labor Department report showing tame consumer price inflation in the month of February.

Concerns about inflation have contributed to the recent spike in bond yields, which has resulted in considerable volatility on Wall Street in recent sessions.

Bond yields pulled back near the unchanged line following the release of the inflation data after moving modestly higher earlier this morning.

The Labor Department said its consumer price index climbed by 0.4 percent in February after rising by 0.3 percent in January. The increase in prices matched expectations.

Gasoline prices led the way higher once again, surging up by 6.4 percent in February following a 7.4 percent spike in January.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in February after coming in unchanged for two straight months. Economists had expected core prices to rise by 0.2 percent.

On an annual basis, consumer price growth accelerated to 1.7 percent in February from 1.4 percent in January but core price growth slowed to 1.3 percent from 1.4 percent.

Later in the day, trading may be impacted by reaction to the results of the Treasury Department’s auction of $38 billion worth of ten-year notes. Demand for the auction could have a notable impact on bond yields.

Traders are also likely to keep an eye on developments in Washington, with the Democrat-controlled House expected to pass the $1.9 trillion relief bill.

Following the sell-off seen on Monday, U.S. technology stocks showed a substantial move back to the upside during trading on Tuesday. The tech-heavy Nasdaq skyrocketed, bouncing off a nearly three-month closing low.

The Nasdaq soared 464.66 points or 3.7 percent to 13,073.82, recording its biggest single-day gain since last November. The S&P 500 also jumped 54.09 points or 1.4 percent to 3,875.44, while the Dow posted a much more modest gain, inching up 30.30 points or 0.1 percent to 31,832.74.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index closed just above the unchanged line, while China’s Shanghai Composite Index edged down by 0.1 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index is up by 0.4 percent and the French CAC 40 Index is up by 0.7 percent.

In commodities trading, crude oil futures are climbing $0.64 to $64.65 a barrel after slumping $1.04 to $64.01 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,717.40, up $0.50 compared to the previous session’s close of $1,716.90. On Tuesday, gold soared $38.90.

On the currency front, the U.S. dollar is trading at 108.59 yen compared to the 108.48 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1899 compared to yesterday’s $1.1901.