Wall Street was set to open higher on Tuesday ahead of inflation data as investors were hopeful that a slowdown in price increases could support a sooner-than-expected end to the Federal Reserve’s policy of rapid monetary tightening.
The latest data, due on Wednesday, is expected to show consumer prices cooled on an annual basis in June, which could influence bets on another rate hike after the July meeting.
Investors have already raised their expectations of a 25 basis-point rate hike later this month after last week’s jobs report pointed to a resilient U.S. economy.
Market participants will also keep a close tab on comments from several central bank policymakers who are expected to speak during the week.
In the previous session, the main U.S. stock indexes closed a choppy session slightly higher after Fed officials signaled the central bank was nearing the end of its monetary tightening cycle.
“Investors are spending a lot of time thinking about the CPI data,” said Peter Andersen, founder of Andersen Capital Management.
“They’re hoping that those numbers will be a little cooled, which might signal to the Fed that rate hikes are working and that there may be an earlier end to future rate hikes.”