U.S. stock index futures moved higher on Wednesday as investors awaited a key inflation reading closely monitored by the Federal Reserve, while also assessing developments in oil markets, reports of possible U.S. diesel export restrictions and economic data from China.
The August personal consumption expenditures price index is expected to indicate that inflationary pressures remained elevated, providing investors with further information ahead of the Federal Reserve’s October monetary policy meeting.
Elsewhere, Brent crude stabilised following a sharp decline in the previous session as signs of recovering Saudi Arabian supply flows offset some concerns about continuing disruptions to Middle East shipments.
U.S. Stock Futures Move Higher
At 03:18 ET, Dow futures were up 247 points, or 0.5%, while S&P 500 futures gained 21 points, or 0.3%. Nasdaq 100 futures increased 52 points, or 0.2%.
The main Wall Street indices recorded modest declines in the previous session as U.S. Treasury yields remained elevated. The benchmark 10-year Treasury yield reached its highest level since 2007, while the 30-year yield touched levels last seen in 2002.
New York Federal Reserve President John Williams said the central bank could need to tighten monetary policy again, but added that there was “no need for urgency” following the Fed’s interest rate increase earlier in September.
Analysts at Vital Knowledge said some market participants interpreted Williams’ comments as an indication that the Federal Reserve could leave rates unchanged at its October meeting.
Continued investor interest in artificial intelligence also provided some support to equities, alongside a limited number of positive earnings reports from consumer-related companies, according to Vital Knowledge.
Investors were also awaiting quarterly results from semiconductor company Micron (NASDAQ:MU), scheduled for release after Wednesday’s market close.
The results are expected to provide further information on demand for memory chips, including demand associated with the expansion of artificial intelligence infrastructure.
U.S. PCE Inflation Data in Focus
One of the main areas of attention during Wednesday’s session is the outlook for U.S. inflation and its implications for Federal Reserve monetary policy.
The personal consumption expenditures price index is closely monitored by Federal Reserve policymakers when assessing inflationary pressures.
Core PCE, which excludes food and energy, is expected to rise 0.3% month on month in August, compared with an increase of 0.2% previously.
Headline PCE is forecast to increase 0.4% month on month, accelerating from 0.2%.
On an annual basis, core PCE inflation is expected to stand at 3.3%, while the headline rate is projected at 3.7%. Both would be unchanged from their July rates and remain above the Federal Reserve’s 2% inflation target.
The figures will provide investors with additional information as they assess whether the Federal Reserve could adjust interest rates again at its October meeting.
Brent Crude Stabilises After Previous Session’s Decline
Oil prices were broadly stable on Wednesday after falling sharply during the previous session, as signs of recovering Middle East exports offset some concerns about continuing disruptions to regional shipments.
At 03:04 ET, benchmark Brent crude futures for November delivery were up 0.3% at $102.87 per barrel. U.S. West Texas Intermediate crude futures declined 0.2% to $89.24 per barrel.
Brent settled 2.6% lower on Tuesday, while WTI declined 3.5%.
The latest movements followed indications that Saudi Arabia was resuming crude loadings at the Red Sea port of Yanbu after restarting operations on a major east-west pipeline crossing the country.
The recovery in Saudi supply flows has reduced some of the immediate supply concerns associated with the war involving Iran, although markets continue to monitor regional energy shipments.
Trump Reportedly Considers Diesel Export Restrictions
U.S. President Donald Trump is considering a range of measures aimed at addressing higher domestic fuel prices, including a possible restriction on diesel exports, according to a Financial Times report cited in the supplied information.
Administration officials have discussed restricting international diesel sales and have briefed allies, including the UK, about possible supply disruptions, the report said, citing people familiar with the discussions.
A White House official cited by the Financial Times said Trump was evaluating options to reduce fuel prices but that no decision had been made regarding exports.
The discussions have highlighted differing positions among Republican lawmakers representing agricultural states and oil companies.
Agricultural groups have raised concerns about the effect of higher diesel prices on farmers and industry ahead of the U.S. midterm elections.
U.S. diesel prices reached $6.53 per gallon last week, more than 70% above their pre-war level, according to the Financial Times report.
China Manufacturing Activity Expands at Fastest Pace in Five Months
China’s manufacturing sector expanded at its fastest pace in five months during September, according to a private-sector survey, while separate data also indicated an improvement in factory and services activity.
The RatingDog Manufacturing purchasing managers’ index increased to 52.1 in September from 51.5 in August.
The reading exceeded expectations of 51.7 and was the highest since April.
The manufacturing PMI remained above the 50 level separating expansion from contraction for a tenth consecutive month.
A separate measure of services activity increased to 51.6 from 51.4, exceeding expectations for a reading of 51.3.