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Stock futures tick higher with all eyes on June’s inflation report

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Stock futures rose slightly Wednesday as investors awaited a key inflation report that is expected to show a fresh high.

Futures tied to the Dow Jones Industrial Average advanced 61 points, or 0.2%. S&P 500 futures climbed 0.2%, and Nasdaq 100 futures gained 0.3%.

The consumer price index, slated for at 8:30 a.m. ET, is expected to climb by 8.8% in June on a year-over-year basis, according to Dow Jones’ survey of economists. That would be even higher than May’s 8.6% reading, which was the biggest increase since 1981.

“The market is anticipating that June will be the new peak,” said Lindsey Bell, Ally’s chief markets and money strategist. “The reading is likely to confirm what the jobs report on Friday told us – that the Fed will stick to their aggressive rate tightening timeline.”

The likely hot reading could prompt the central bank to hike another 75 basis points during this month’s meeting. Last month, the Fed raised its benchmark interest rates three-quarters of a percentage point to a range of 1.5%-1.75% in its most aggressive hike since 1994.

“The Fed’s credibility will be tested in coming months with the release of inflation numbers and corporate earnings,” said Andy Sparks, head of portfolio management research at MSCI. “The Fed’s recent aggressive actions to bring down inflation also run the risk of overshooting, pushing an economy that had been showing signs of weakness into a full scale recession.”

Meanwhile, investors will monitor second-quarter corporate earnings as major banks are set to report this week. JPMorgan and Morgan Stanley are slated to post results Thursday before the bell. Delta Air Lines reports before the bell Wednesday.

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