(Reuters) – U.S. stock index futures were largely flat on Tuesday ahead of key inflation data that is likely to seal the case for a 50 basis points interest rate hike in May by the Federal Reserve as it amps up its battle against surging prices.
The Labor Department’s report, due at 8:30 a.m. ET, is expected to show consumer prices shot up to 8.4% in the 12 months through March, compared with 7.9% in February, as Russia’s invasion of Ukraine drove gasoline costs to record highs.
Traders have raised bets of bigger interest rate hikes this year, driven by a spike in commodity prices from the Ukraine conflict, a tight labor market and recent hawkish comments from Fed policymakers.
Money markets see a 93.5% likelihood of a 50 basis point rate hike at the central bank’s meeting next month. [IRPR]
Rate-sensitive banks such as Wells Fargo & Co, Bank of America Corp and Citigroup Inc inched higher in premarket trading.
Surging Treasury yields have triggered a rout in growth stocks in the recent weeks, with the tech-heavy Nasdaq now down 14.3% so far this year, leading losses among the three major U.S. indexes.
The benchmark U.S. 10-year Treasury yield rose to new highs above 2.80%, levels last seen late 2018, on unease that an aggressive policy response to inflation from the Fed could undermine economic growth. [US/]
At 06:47 a.m. ET, Dow e-minis were up 6 points, or 0.02%, S&P 500 e-minis were up 2.75 points, or 0.06%, and Nasdaq 100 e-minis were up 23.75 points, or 0.17%.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila)
