Stock market today: Wall Street points higher again ahead of new US inflation data

By ELAINE KURTENBACH and MATT OTT
AP Business Writers

Wall Street inched higher early Wednesday ahead of an update on U.S. inflation that could play into the Federal Reserve’s interest rate decision this month.

Futures for the S&P 500 rose 0.3% before the bell, with every sector pointing higher following the strongest day of trading in U.S. markets this month. Futures for the Dow Jones Industrial Average gained less than 0.2%.

Before Wednesday’s opening bell, the U.S. government will report on inflation at the consumer level. Economists expect to see another slowdown, with prices 3.1% higher in June than a year earlier, down from inflation of 4% in May and just above 9% last summer.

A continued easing in inflation could nudge the Federal Reserve toward easing back from the aggressive interest rate hikes it’s made to cool the U.S. economy. High rates have helped pull down inflation, but they’ve also caused cracks in the banking, housing, manufacturing and other industries while also suppressing stocks and deal making.

However, Chair Jerome Powell has said the Fed is prepared to keep interest rates at their peak for an extended period to tame rising prices that have shrunk Americans’ inflation-adjusted paychecks and disrupted businesses. The Fed’s policymakers, as a group, envision two additional rate hikes this year.

In an effort to corral inflation, the Federal Reserve raised its benchmark borrowing rate 10 times in 15 months, before hitting pause at its most recent meeting in June.

“It would take something remarkable from the inflation report today to convince policymakers that they can afford to pause again,” Craig Erlam of Oanda said in a commentary.

In Europe, the Bank of England warned Wednesday that households are facing increasing problems from sharply rising interest rates but expressed hope that the country’s biggest banks were resilient enough to offer more help than they could before the global financial crisis 15 years ago.

At midday, Britain’s FTSE 100 jumped 1.2%, Germany’s DAX picked up 0.9% and the CAC 40 in Paris rose 0.7%.

In Asian trading, Tokyo’s Nikkei 225 dropped 0.8% to 31,943.93 after North Korea launched a long-range ballistic missile toward its eastern waters Wednesday, two days after the North threatened “shocking” consequences to protest what it called provocative U.S. reconnaissance activity near its territory.

Hong Kong’s Hang Seng index surged 1.1% to 18,860.95 and the S&P/ASX 200 in Australia added 0.4% to 7,135.70. In Seoul, the Kospi rose 0.5% to 2,574.72.

The Shanghai Composite index sank 0.8% to 3,196.13. Shares rose in Taiwan but fell in India.

Later in the week, major U.S. corporations will begin releasing their quarterly earnings reports, and expectations for the spring quarter are not high. Analysts expect the sharpest drop in earnings per share for S&P 500 companies since the pandemic crushed the global economy in the spring of 2020.

Delta Air Lines and PepsiCo report quarterly performances on Thursday, followed by several big banks, including JP Morgan, Wells Fargo and Citigroup, on Friday.

In other trading Wednesday, benchmark U.S. crude oil gained 8 cents to $74.91 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.84 on Tuesday. Brent crude oil, the price basis for international trading, was up 4 cents at $79.44 a barrel.

The dollar fell to 139.59 Japanese yen from 140.36 yen. The euro rose to $1.1020 from $1.1006.

On Tuesday, the S&P 500 rose 0.7%, the Dow gained 0.9% and the Nasdaq composite added 0.5% to 13,760.70.

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Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.