© Reuters
By Peter Nurse
Investing.com — U.S. stocks are seen opening lower Wednesday, handing back some of the week’s gains in muted trading ahead of key inflation data which could guide future Federal Reserve monetary policy.
At 7 AM ET (1100 GMT), the contract was down 130 points, or 0.4%, traded 14 points, or 0.4% lower, and dropped 23 points, or 0.2%.
The main indices on Wall Street closed higher Tuesday for the second day this week, with the blue-chip gaining over 260 points, or 0.8%, while the broad-based and the tech-heavy closed 0.9% higher.
These gains occurred despite big-box retailer Target (NYSE:) cutting its profit guidance, highlighting the risks to economic growth from the current high levels of inflation and the associated moves by the Federal Reserve to combat this.
Treasury Secretary told the Senate Finance Committee on Tuesday she expects inflation to remain high. Yellen testifies again later Wednesday, but the main focus is on Friday’s for May, amid expectations that it could provide clues on the future path of after the hikes next week and in July.
The cut its growth forecasts in its latest Economic Outlook, published earlier Wednesday, while lifting its inflation forecasts, citing Russia’s invasion of Ukraine and the West’s response to it.
The Paris-based group now sees global growth of 3% this year, much less than the 4.5% it expected in December, while inflation is expected to peak at 8.5% this year, above the previously forecast high of 5%.
The had earlier cut its forecast for global growth this year to 2.9%.
In corporate news, Novavax (NASDAQ:) stock is seen surging premarket after the drugmaker’s two-dose COVID-19 vaccine took a huge step toward regulatory authorization in the U.S., with the Food and Drug Administration panel voting overwhelmingly that its benefits outweigh its risk.
Earnings from the likes of spirits maker Brown-Forman (NYSE:), owner of the Jack Daniels and Finlandia brands, food maker Campbell Soup (NYSE:) and discount store Five Below (NASDAQ:) are scheduled for release in the session.
Oil prices climbed Wednesday, maintaining the recent upward momentum as the U.S. summer driving season kicks into gear and China emerges from virus lockdowns.
The United Arab Emirates Energy Minister Suhail Al Mazroui warned that the global supply-demand balance threatened to worsen considerably, pushing prices higher still as demand in China rebounds.
Official data from the U.S. is due at 10:30 AM ET (1430 GMT), after industry body, the , on Tuesday reported a surprise build of 1.8 million barrels for last week.
By 7 AM ET, futures traded 1.1% higher at $120.72 a barrel, after reaching its highest settlement since March 8 on Tuesday. The contract rose 1% to $121.73, after closing at the highest since May 31.
Additionally, fell 0.1% to $1,849.90/oz, while traded 0.2% higher at 1.0722.
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