Futures subdued with inflation, jobless claims data in focus

U.S. stock index futures were subdued on Thursday ahead of fresh economic data that could offer clues on the Federal Reserve’s monetary tightening plans, while investors also waited for earnings from big banks after turmoil in the sector last month.

Following a selloff in March due to the banking crisis, the benchmark S&P 500 has traded in tight ranges this month as investors assessed the path for U.S. interest rates following strong jobs data and signs of cooling inflation.

Wall Street closed lower on Wednesday after data showed consumer prices rose at a slower-than-expected pace in March, however, core prices remained sticky and supported the case for another 25-basis point rate hike by the Fed in May.

“There is certainly some optimism that prices are heading in the right direction and that inflation is slowing,” said Michael Hewson, chief market analyst at CMC Markets UK.

“However, against this sort of stodginess in core prices, it’s hard to imagine inflation falling quickly enough to justify the sort of rapid repricing which would prompt the Fed to start cutting rates only months after their last rate hike.”

Adding to the downbeat mood was minutes from the Fed’s latest policy meeting that indicated concerns of a recession following the banking sector stress and that several policymakers considered pausing rate hikes last month.

Data at 8:30 a.m. ET (1230 GMT) is expected to show producer prices barely rose in March on a month-on-month basis, following a 0.1% contraction in February. On a year-over-year basis, the index is seen climbing 3.0% last month after a 4.6% growth in February.

Meanwhile, another set of data is also expected to show weekly jobless claims rose 232,000 in the week ended April 8, higher than the 228,000 claims filed a week earlier.

Big U.S. banks JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C) and Wells Fargo (NYSE:WFC) & Co are scheduled to report quarterly results on Friday, and investors will watch them closely for details about the sector’s overall health.

Most Wall Street banks are likely to report lower quarterly earnings and give a dour outlook, with the regional banking crisis and a slowing economy expected to weigh on profitability.

Analysts expect S&P 500 companies to record a profit decline of 5.2% in the first quarter, as per Refinitiv IBES data, in what could be their worst showing since the third quarter of 2020.

Financial companies that are part of the S&P 500 are expected to report a profit growth of 4.3% in the first quarter.

At 6:46 a.m. ET, Dow e-minis were down 4 points, or 0.01%, S&P 500 e-minis were up 3.75 points, or 0.09%, and Nasdaq 100 e-minis were up 30.5 points, or 0.24%.

Among major movers, shares of Delta Air Lines (NYSE:DAL) gained 4.3% in premarket trading following a higher-than-expected second-quarter profit forecast, citing “record” bookings for summer travel.

Harley-Davidson Inc (NYSE:HOG) dropped 3.6% after the motorcycle maker said Chief Financial Officer Gina Goetter was leaving the company at the end of April.

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