Inventory futures are just a little increased forward of a serious inflation report
US stock futures were slightly higher on Wednesday as investors anticipate the start of earnings season and a new inflation reading.
Dow Jones Industrial average futures rose 32 points, while S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.4%.
Investors will watch out for the September consumer inflation report, which is expected to continue rising at the same pace as August.
According to Dow Jones estimates, economists expect a 0.3% increase, or an annualized rate of 5.3%, if the consumer price index is released at 8:30 a.m. ET on Wednesday. Excluding energy and food, the CPI is projected to increase 0.3% month-over-month or 4% on a yearly basis.
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“I think it might get hot,” said Grant Thornton’s chief economist Diane Swonk. “It looks like we can get broader inflation. There’s a supply shock there. They’re starting to broadcast energy prices and other things.”
The third quarter earnings season began on Wednesday with JPMorgan Chase, who said quarterly earnings exceeded expectations after being driven higher by better-than-expected loan defaults. The revenues of the largest US bank in terms of assets were also higher than expected.
JPMorgan stock rose in pre-trading hours.
Delta Air Lines also announced financial results on Wednesday before the opening bell. The airline achieved unexpectedly high sales and its first quarterly profit without taking federal aid since the beginning of the pandemic into account.
However, Delta shares fell slightly in the pre-market as the company said higher fuel bills and other expenses will weigh on fourth quarter results.
“This clearly represents the first quarter of real EPS risk that investors have had to grapple with in the wake of the COVID rebound as GDP estimates have collapsed since mid-August due to historical supply chain issues,” said Tavis McCourt, institutional equity strategist at Raymond James.
“Consensus EPS at the index level has not changed much, however, as notably a larger number of stocks have seen positive earnings revisions than negative ones since mid-August,” added McCourt.
Apple shares were slightly lower in pre-trading hours after a report from Bloomberg News said production of the iPhone 13 will likely be scaled back due to a shortage of chips. Chip makers like Skyworks and Broadcom were also lower in pre-trading.
The Federal Open Market Committee will publish the minutes of its September meeting on Wednesday at 2 p.m. Investors will be looking for guidance on the timelines related to the central bank’s proposed throttling of its bond purchase program.
On Tuesday, the major averages fell for the third session in a row. The Dow Jones Industrial Average lost 117 points, dragged down by a 1.3% decline in Boeing stock. The S&P 500 lost 0.24%. The technology-driven Nasdaq Composite finished just 0.14% lower.
Meanwhile, small-cap stocks outperformed Tuesday, with the Russell 2000 gaining 0.6%.
– with reports from CNBC’s Patti Domm.