Market Snapshot: Dow on pace for 4th win in a row, as market braces for inflation data

U.S. stock futures pointed to a gain at the open, setting the Dow on track for its fourth up day in a row, as global equity markets recover from their selloff earlier this month.

Investors are bracing for a reading on inflation that’s due before the open. The data has taken on heightened significance as the recent market drop has been blamed in large part on inflation concerns.

Check out: Why this investment pro thinks inflation fears are overblown

And read: Higher wages spook Wall Street, but fresh fears of inflation look overdone

What are the main benchmarks doing?

Dow Jones Industrial Average futures YMH8, +0.43% rose by 117 points, or 0.5%, to 24,743, while S&P 500 futures ESH8, +0.33% added 9.80 points, or 0.4%, to 2,671.50. Nasdaq-100 futures NQH8, +0.37% tacked on 30.50 points, or 0.5%, to 6,591.

On Tuesday, the Dow DJIA, +0.16% , S&P 500 SPX, +0.26% and Nasdaq Composite COMP, +0.45% all scored modest gains, leaving each gauge 7% below its January record close.

What could help drive markets?

The three indexes have rallied for three straight sessions, recovering from a tumble this month that strategists pinned in large part on rising bond yields amid signs of inflation. The higher yields lured money out of equities, which also looked overdue for a drop after a relentless runup.

Read: Here’s a 10-step plan the stock market must complete to get back on track

And see: This market selloff was overdue, but now it looks overdone

The January report on inflation is slated to hit at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting a 0.4% rise for the consumer price index, along with a 0.2% rise for the core CPI.

What are strategists saying?

“Today’s U.S. CPI inflation report has taken on an importance all of its own in the wake of the recently strong wages numbers, never mind the fact that the Fed doesn’t even use CPI to target inflation,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note.

“Nonetheless, this renewed focus on inflation, not only in the U.S. but more globally, has raised concerns that central banks may well be behind the curve when it comes to assessing the outlook for the next few months.”

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What other economic reports are due?

On the docket alongside the inflation report is a release on January retail sales, scheduled for 8:30 a.m. Eastern, with 0.2% growth expected. Then a December reading on business inventories is scheduled to land at 10 a.m. Eastern.

Check out: MarketWatch’s Economic Calendar

No Federal Reserve official is scheduled to give a speech.

What are other assets doing?

European stocks SXXP, +0.70% mostly gained, while Asian markets finished mixed.

Gold futures GCG8, +0.47% edged higher, as oil futures CLH8, -0.81% and the ICE U.S. Dollar Index DXY, -0.04% lost ground.

Which stocks look like key movers?

Fossil Group Inc.’s stock FOSL, +7.75% looks set for a big up day, after the watch seller’s shares soared more than 50% in late trading Tuesday in the wake of better-than-expected earnings.

Chipotle Mexican Grill Inc.’s shares CMG, -1.23% also appear on track for gains after the burrito chain late Tuesday named a new CEO: Brian Niccol, previously the CEO for Yum Brands Inc.’s YUM, +0.08% Taco Bell business.

Shares in Hilton Worldwide Holdings Inc. HLT, +1.70%  , Dr Pepper Snapple Group Inc. DPS, -0.68% and Molson Coors Brewing Co. TAP, -0.09% are likely to see active trading as they’re among the companies expected to post earnings before the open.

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