U.S. stock futures pointed higher Wednesday. At 4:30 a.m. ET, Dow e-minis were up 201 points, or 0.63%, S&P 500 e-minis were up 31.25 points, or 0.78%, and Nasdaq 100 e-minis were up 132 points, or 1.07%.
Investors on Wednesday are bracing for another inflation report north of 8%, though the number may provide some relief for those looking for the CPI to start cooling off. While April's Consumer Price Index is expected to come in at a flaming 8.1% Y/Y, the figure would be down from the 8.5% print seen in March, which marked the highest inflation level seen since the early 1980s.
The April consumer-price index reading could be the sign of peak inflation stock investors are waiting for when it’s released on Wednesday. Or not.
Economists polled by The Wall Street Journal expect the CPI to show a 0.2% increase in April from March, a sharp slowdown from the prior 1.2% month-over-month pace as energy prices retreated a bit. However, economists expect core inflation, which excludes volatile food and energy prices, to tick up to a 0.4% increase in April, versus a 0.3% increase the month prior.
On a year-over-year basis, economists expect CPI rose 8.1% in April, down from an 8.5% annualized pace in March, with the annualized core rate falling to 6% in April from 6.5% in March. Declines in these readings would mark the first time in five months that the index hasn’t increased at the fastest pace in 40 years.
While one month of data don’t cement a trend, market observers are hoping signs of moderating inflation will keep the Federal Reserve on its steady, predictable path to raise rates and tighten policy. Fed Chairman Jerome Powell, in his press conference following the central bank’s May 3-4 policy meeting, dismissed talk of 0.75-percentage-point rate hikes and expressed confidence policy makers could rein in inflation in a measured way while guiding the economy to a “soft or softish landing.”
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