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U.S. STOCK FUTURES CHEER COOLER-THAN-EXPECTED CPI

The main U.S. equity index futures are higher after the release of the latest data on U.S. consumer prices. E-mini S&P 500 futures EScv1 are now up around 1.1% vs a gain of around 0.8% just before the numbers came out.

February headline CPI month-over-month and year-over-year came in cooler-than-expected. The month-over-month and year-over-year core prints were also below estimates.

Separately, the mortgage market index jumped to 269.3 from 242.2 last week:

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 4.25%-4.50% unchanged at its March 18-19 FOMC meeting is unchanged at around 97%. The chance that the FOMC cuts rates by 25 basis points is 3%.

Looking out further out into 2025, the market is showing a bias for three rate cuts to occur, one in June, September and December, for a total of around 68 basis points.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.33%. It was around 4.31% just before the numbers came out. The yield ended Tuesday at 4.2880%.

Most S&P 500 index .SPX sector SPDR ETFs are quoted higher in premarket trade. Consumer discretionary XLY.P, up about 1.9%, is posting the biggest rise. Utilities XLU.P and staples XLP.P are both slipping.

The SPDR S&P regional banking ETF KRE.P is rallying about 1.5%.

Regarding the inflation data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"We’re not out of the woods, yet. We’re not even in the woods. This report will serve as the baseline for seeing how much tariffs are resulting in higher consumer prices."

Jacobsen added "Good news on CPI could be bad news for profit margins of businesses. Someone pays the price of tariffs and the question is whether companies have the pricing power to push cost increases onto households."

Here is a premarket snapshot from around 08:55 a.m. EST:

(Terence Gabriel, Chuck Mikolajczak)

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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

EUROPEAN LUXURY IN A U.S. SLOWDOWN - CLICK HERE

WALL ST'S WOBBLES: RECESSION OR ROTATION? - CLICK HERE

BUY THE DIP, SAYS BARCLAYS ON DEFENCE - CLICK HERE

CEASEFIRE VIBES BOOST BANKS AND BUILDERS - CLICK HERE

BEFORE THE BELL: EUROPE RECOVERS, EYES ON INFLATION, EARNINGS - CLICK HERE

UKRAINE TALKS LIFT EURO BUT TARIFF WORRIES LINGER - CLICK HERE