U.S. stock futures opened higher Tuesday evening after a choppy day in markets, as investors digested another hot print on inflation and looked ahead to a busy day of earnings on Wednesday.
Contracts on the S&P 500 were flat to slightly positive. The index closed lower for a third straight session during the regular trading day on Tuesday, and both the Dow Jones Industrial Average and Nasdaq Composite also declined.
Investors on Wednesday are set to receive a number of quarterly reports from some major U.S. companies and stock index components. These will include JPMorgan Chase (JPM) — the largest U.S. bank by assets — along with Bed, Bath & Beyond (BBBY), BlackRock (BLK) and Delta Air Lines (DAL).
These reports will help set the tone for what is expected to be a much milder quarter for earnings growth than in recent periods, as companies grapple with rising labor, raw material and transportation costs, and lap last year's initial reopening-fueled jump in activity. Across the S&P 500, companies in aggregate are expected to report year-over-year earnings growth of just 4.5%, which if realized, would mark the slowest rate since the fourth quarter of 2020, according to FactSet.
"This earnings season becomes one of the most important earnings seasons because it's going to give you a lot of insight into which companies ... have that durable demand, which companies have that pricing power," Kristen Bitterly, Citi head of global wealth investments, told Yahoo Finance Live on Tuesday.
"Even in decades like the 1970s, when we had extreme inflation, large-cap quality U.S. equity shares were able to double their share price over that period," she added. "So that's the pocket of the market where we're confidently either staying invested or getting invested."
And indeed, inflation has remained a primary concern for investors, threatening to weigh further on both consumers' wallets and corporate profits. The Bureau of Labor Statistics' March Consumer Price Index (CPI) showed inflation rose at the fastest rate since late 1981 last month, jumping by a slightly faster-than-expected 8.5% over last year.
However, some economists suggested the report was not all bad news, and showed some tentative signs of a peak in the rate of price increases.
"The CPI report I think actually has a little bit more good news in it than it appears right on the surface ... there're a number of things in here that suggests that we're starting to see inflation peak, and it will roll over in the next few months," Tom Simmons, Jefferies fixed income money market economist, told Yahoo Finance Live on Tuesday. "[It's] important to keep in mind that CPI, for March, the reference period here was right after the Russian invasion of Ukraine. So really, it's capturing the most acute period of gasoline price increases. And we've seen them already starting to soften in the market a little bit in the few weeks since."
"The other thing is that services ex-energy — and if you strip out the airline component — that was actually a little bit softer as well than the last few months," he added. "Housing actually came in a little bit softer in the last few months as well, and goods ex-energy also are coming in a little bit softer as well. So you know, the consumer has been pretty well able to weather the storm here with inflation."
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6:10 p.m. ET Tuesday: Stock futures head for a lower open
Here's where markets were trading Tuesday evening before the opening bell:
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S&P 500 futures (ES=F): +4.25 points (+0.1%) to 4,397.25
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Dow futures (YM=F): +33 points (+0.1%) to 34,172.00
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Nasdaq futures (NQ=F): +17.75 points (+0.13%) to 13,962.75
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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