The major U.S. index futures for the Dow Jones, S&P and Nasdaq are currently pointing to a sharply higher open on Wednesday, with stocks likely to move to the upside after ending the previous session off their worst levels but still mostly lower.
The futures advanced following the release of a closely watched Labor Department report showing consumer prices in the U.S. increased by slightly less than expected in the month of February.
The Labor Department said its consumer price index crept up by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected consumer prices to rise by 0.3 percent.
Excluding food and energy prices, the core consumer price index also rose by 0.2 percent in February following a 0.4 percent increase in January. Core prices were also expected to climb by 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 2.8 percent in February from 3.0 percent in January. Economists had expected the pace of price growth to edge down to 2.9 percent.
The annual rate of core consumer price growth also slowed to 3.1 percent in February from 3.3 percent in January. Core price growth was expected to dip to 3.2 percent.
The tamer-than-expected inflation may lead to optimism about the Federal Reserve resuming interest rate cuts in the near future.
Positive sentiment may also be generated in reaction to news Ukraine has agreed to a U.S. proposal for an “immediate, interim 30-day ceasefire” with Russia
However, traders may be somewhat reluctant to get back into the markets amid lingering concerns about the impact of new trade policies.
With new U.S. steel and aluminum imports taking effect today, the European Union said it would impose counter tariffs on 26 billion euros ($28 billion) worth of U.S. goods beginning next month.
U.S. stocks closed on a negative note on Tuesday after a highly volatile session. The major averages all closed in the red despite a recovery attempt past mid afternoon.
Worries about the global economic outlook and fears of a possible recession in the U.S. due to the trade war hurt investor sentiment.
The Dow settled lower by 478.23 points or 1.1 percent at 41,433.48 after hitting a low of 41,175.37 and a high of 41,868.27 in the session.
The S&P 500 ended down 42.49 points or 0.8 percent, at 5,572.07, while the Nasdaq settled lower by 32.23 points or 0.2 percent, at 17,436.10. The Nasdaq climbed to 17,687.40 in the final hour, rallying from a low of 17,238.24.
U.S. President Donald Trump said that he was reconsidering plans to double tariffs on Canadian steel and aluminum to 50 percent.
Canada, which had earlier said it would impose tariffs on electricity exports to the U.S., agreed to suspend the 25 percent hike after agreeing to meet on Thursday to discuss a pathway to renew the new North American trade agreement.
Meanwhile, a senior White House official has said the higher tariff on Canadian steel and aluminum imports into the U.S. will not become effective tomorrow.
The change in stance resulted in a recovery in the final hour, but the market still ended on a weak note.
Delta Air Line shares dropped more than 7 percent following a profit warning by the company. American Airlines ended more than 8 percent down.
Verizon, Moderna, ResMed, Texas Instruments, IBM, Apple, Oracle and Chevron also declined sharply.
Southwest Airlines soared 8 percent after the airline said it would launch a new basis fare tire.
Tesla climbed sharply, gaining more than 3 percent, Boeing, Netflix, Micron Technology, Salesforce, Wells Fargo and Amazon also closed notably higher.
In economic news, a report released by the Labor Department showed job openings in the U.S. increased by more than expected in the month of January.
The Labor Department said job openings climbed to 7.74 million in January from a downwardly revised 7.51 million in December.
Economists had expected jobless claims to inch up to 7.63 million from the 7.60 million originally reported for the previous month.