Markets are awaiting fresh U.S. inflation figures that could factor into how the Federal Reserve approaches potential interest rate cuts this year. Stock futures on Wall Street inch broadly higher ahead of the data. Oracle (NYSE:ORCL) shares surge in extended hours trading after the tech group posts an AI-driven earnings beat, while the price of Bitcoin remains just under a recent record high.
1. Inflation data ahead
U.S. inflation data for February is set to take center stage on Tuesday, with markets keen to see if the figures provide any clues into the future path of Federal Reserve monetary policy.
Economists anticipate that the overall consumer price index (CPI) will match the prior month’s pace of 3.1% on an annual basis. So-called “core” CPI, which strips out volatile items like food and fuel, is seen slowing to 3.7% from 3.9% in January.
However, more focus will likely be placed on the month-on-month gauge, which may shed light on the momentum of price gains. The headline number is projected to speed up slightly to 0.4% and the core reading is expected to decelerate marginally to 0.3%.
Fed officials have made cooling inflation the major objective of a series of interest rate hikes that have brought borrowing costs up to more than two-decade highs. They have suggested that cuts may be coming later this year, but stressed that they first need to see more evidence that price growth is sustainably easing back down to their 2% annualized target.
“In the eyes of the Fed, [inflation] is likely still too hot for comfort,” analysts at ING said in a note.
2. Futures mostly higher
U.S. stock futures moved mostly higher ahead of the CPI print.
By 04:30 ET (08:30 GMT), the Dow futures contract had gained 18 points or 0.1%, S&P 500 futures had risen by 15 points or 0.3%, and Nasdaq 100 futures had climbed by 92 points or 0.5%.
The benchmark S&P 500 and tech-heavy Nasdaq Composite slipped on Monday, weighed down by a declines in semiconductor stocks like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD). Shares in many major tech groups were nursing losses over the previous two sessions, as investors locked in recent profits in the sector prior to the release of the key inflation data.
Outperforming the main indices on Monday was the Dow Jones Industrial Average. The blue-chip index rose by 0.1% despite a dip in Boeing (NYSE:BA) shares following reports that planemaker faced a Justice Department investigation over a January mid-air fuselage breach on one of its 737 Max jets operated by Alaska Airlines.
3. Oracle shares surge after earnings
Oracle was one of the best performers in extended hours trading, surging nearly 14% after clocking stronger-than-expected quarterly earnings thanks to increased demand for its AI offerings.
Profit per-share excluding items jumped by 16% in its fiscal third quarter to $1.41, topping Bloomberg consensus estimates of $1.38, while adjusted revenue of $13.28 billion was in line with expectations.
The cloud computing firm said it will make a joint announcement with Nvidia this week and mentioned the AI darling multiple times in a post-results call with analysts. Nvidia makes AI-optimized chips that Oracle’s cloud service customers can use.
Gains in Oracle spilled over into other tech heavyweights after markets closed on Monday, in a sign of the influence the enthusiasm over AI has had over stock gains in recent months. Nvidia rose 2.0%, while Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) both added 0.6% by 04:06 ET.
4. Bitcoin keeps record highs in sight
Bitcoin hovered below record highs in European trade, seeing continued support from steady inflows into the spot exchange-traded funds that were given the green light by U.S. regulators earlier this year.
The world’s largest cryptocurrency traded up 0.8% at $71,707.1 by 04:16 ET, paring back some gains notched in Asian dealmaking but remaining close to an all-time peak of $72,771 hit on Monday.
Bitcoin’s latest march higher extends a rally that was partly triggered by the approval of the spot ETFs in January, which invited a heavy amount of institutional capital into the token.
Bitcoin was also boosted by MicroStrategy, the biggest corporate holder of the digital asset, buying 12,000 tokens on Monday using debt.
5. Oil edges up
Oil prices inched up on Tuesday, but gains were limited as traders remained largely cautious before the U.S. inflation data and looked ahead to an upcoming monthly report from the OPEC oil group.
Crude prices have been largely rangebound in recent sessions amid conflicting signals on demand and supply. Brent and WTI futures have traded within the $85 a barrel to $75 a barrel range for the past three weeks.
Oil markets are assessing downbeat demand signals out of China, the world’s largest crude importer. Beijing set a middling growth target for 2024, and also offered scant insight into more stimulus measures. These concerns were partially offset by hopes for U.S. crude demand, as several refiners in the country began increasing production after an extended break.
Markets were now awaiting a monthly report from the Organization of the Petroleum Exporting Countries for more cues on demand, especially after it said it will maintain its current pace of production cuts until end-June.
Meanwhile, few signs of deescalation in the Israel-Hamas war pointed to ongoing supply risks in the Middle East.
Brent oil futures expiring in May rose 0.9% to $82.94 a barrel, while West Texas Intermediate crude futures added 0.9% to $78.24 per barrel by 04:26 ET.
https://www.investing.com/news/economy/inflation-data-ahead-oracle-earnings–whats-moving-markets-3333485
