By Peter Nurse
Investing.com — U.S. stocks are seen opening marginally higher Tuesday, with investors cautiously awaiting the August consumer price index release which is likely to set the tone ahead of next week’s Federal Reserve policy meeting.
At 07:00 ET (11:00 GMT), the contract was up 215 points or 0.7%, traded 28 points or 0.7% higher, and climbed 75 points or 0.6%.
The major equity averages closed higher Monday, continuing last week’s relief rally, with the blue-chip gaining over 200 points or 0.7%, the broad-based closing up 1.1%, and the tech-heavy jumping 1.3%.
Market confidence appears to have been bolstered by the belief that inflation has already peaked, and with this in mind, the August inflation report, due at 08:30 ET (12:30 GMT), is firmly in the spotlight.
This report comes just about a week before the ‘s next policy meeting, and is expected to show that inflation has slowed with energy and commodities prices having fallen sharply in the last month.
The annual number is expected to come in at 8.1%, down from 8.5% in July, while the figure is seen falling 0.1%, compared with a flat number the prior month.
The market will be looking at not just the headline number but the that strips out food and fuel, and this is expected to come in at 0.3% on the month, unchanged from July’s release.
Signs of tumbling inflation could cause the Fed to pause interest rate hikes sooner than widely expected, Credit Suisse (SIX:) said, which would launch a powerful market surge.
“Every one of us sees when we go to the gas station that the price of gasoline is down, and oil is down. We see it even with food. So, it really is showing up in the data already,” said the bank’s U.S. equity strategist Jonathan Golub, in an interview with CNBC on Monday. “And, that’s a really big potential positive.”
In the corporate sector, Peloton (NASDAQ:) will be in focus after the troubled exercise bike maker announced that co-founders John Foley and Hisao Kushi are stepping down from their executive roles as part of a restructuring.
Starbucks (NASDAQ:) is holding an investor day later Tuesday, while Oracle (NYSE:) stock rose 2% premarket after the software maker healthy first quarter revenues as demand for its cloud services remained strong and it started to reap the benefits of buying healthcare IT firm Cerner (NASDAQ:).
Oil prices rose Tuesday ahead of the release of not only the U.S. inflation data, which will likely impact the but also OPEC’s monthly outlook report.
The Organization of Petroleum Exporting Countries and its allies agreed last week to reduce crude production, and traders will look to the report, due later in the session, for more cues on global demand.
The , an industry group, is scheduled to report its U.S. inventory report later Tuesday, ahead of the official report the following day.
By 07:00 ET, futures traded 1.2% higher at $88.80 a barrel, while the contract rose 1.1% to $95.00.
Additionally, fell 0.2% to $1,738.15/oz, while traded 0.2% higher at 1.0139.
