Hotter-Than-Expected Inflation Data May Weigh On Wall Street

The major U.S. index futures are currently pointing to a modestly lower open on Wednesday, with stocks likely to give back ground after moving higher over the two previous sessions.

The futures edged lower following the release of a Labor Department report showing producer prices in the U.S. increased by much more than expected in the month of February.

The Labor Department said its producer price index for final demand advanced by 0.7 percent in February after climbing by 0.5 percent in January. Economists had expected producer prices to rise by 0.3 percent.

The report also said the annual rate of growth by producer prices accelerated to 3.4 percent in February from 2.9 percent in January. Yearly growth was expected to remain unchanged.

Along with the recent spike in crude oil prices due to the Middle East war, the data may add to recent concerns about the outlook for inflation.

However, traders may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement later this afternoon.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to central bank officials’ latest projections.

Following the recovery rally seen in the previous session, stocks showed another strong move to the upside in early trading on Tuesday but gave back ground over the course of the day. The major averages pulled back well off their highs of the session but managed to close in positive territory.

The major averages added to the strong gains posted on Monday, climbing further off Friday’s three-month closing lows. The Nasdaq climbed 105.35 points or 0.5 percent to 22,479.53, the S&P 500 rose 16.71 points or 0.3 percent to 6,716.09 and the Dow inched up 46.85 points or 0.1 percent to 46,993.26.

The early strength on Wall Street came as traders attempted to shrug off the recent volatility shown by the price of crude oil, which has been a key driver of trading in recent sessions.

Stocks extended the significant rebound seen in the previous session even as the price of crude oil recovered from Monday’s pullback.

The rebound by the price of crude oil came after Iran launched a series of attacks on the United Arab Emirates, targeting Dubai’s international airport and the Fujairah oil port, marking a sharp escalation in the ongoing conflict.

The Israeli military also said it had begun a “wide-scale wave of strikes” across Iran’s capital and was also stepping up strikes on Iran-backed Hezbollah targets in Lebanon.

Meanwhile, several U.S. allies, including Germany, Spain, Italy, Australia and Japan have declined President Donald Trump’s request to secure the Strait of Hormuz, a vital artery for a fifth of global energy shipments.

Traders may have been reluctant to make more significant moves ahead of the Fed’s announcement of its latest monetary policy decision.

Oil service stocks moved sharply higher along with the price of crude oil, resulting in a 3 percent surge by the Philadelphia Oil Service Index.

Significant strength was also visible among airline stocks, as reflected by the 2.8 percent jump by the NYSE Arca Airline Index. The strength in the sector came after several airlines raised their revenue guidance for the first quarter.

Computer hardware, oil producer and brokerage stocks also saw considerable strength on the day, while pharmaceutical stocks have shown a notable move to the downside.

Eli Lilly (LLY) helped lead the pharmaceutical sector lower, tumbling by 5.9 percent after HSBC Securities downgraded its rating on the drug maker’s stock to Reduce from Hold.

Commodity, Currency Markets

Crude oil futures are edging down $0.03 to $96.18 a barrel after surging $2.71 to $96.21 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,889.20, down $119 compared to the previous session’s close of $5,008.20. On Tuesday, gold inched up $6.

On the currency front, the U.S. dollar is trading at 159.35 yen compared to the 158.98 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1516 compared to yesterday’s $1.1538.

Asia

Asian stocks rose broadly on Wednesday as oil prices fell sharply and investors braced for the U.S. Federal Reserve’s interest rate decision later in the day.

Markets expect the Fed to leave policy unchanged amid rising uncertainty from the Middle East conflict. Markets will closely track Fed Chair Jerome Powell’s remarks on inflation, employment and growth.

The dollar softened as easing oil prices helped lift investors’ appetite for riskier assets. Gold was little changed at $5,005 an ounce, while oil prices fell nearly 2 percent after a surprise build in U.S. crude inventories.

The Middle East war continued to escalate as attacks on the UAE’s energy infrastructure heightened fears of prolonged supply disruptions. Iran confirmed the death of its security chief in a further intensification of the conflict.

China’s Shanghai Composite Index rose by 0.3 percent to 4,062.98 and Hong Kong’s Hang Seng Index closed 0.6 percent higher at 26,025.42 following upbeat remarks from Nvidia’s chief executive Jensen Huang on the promise of AI agents and OpenClaw.

Japanese markets rallied as the yen gained on hawkish BoJ bets, alleviating concerns of possible intervention by authorities ahead of a crucial meeting between Prime Minister Sanae Takaichi with U.S. President Donald Trump.

Investors also cheered strong data that showed Japanese exports rose for a sixth straight month in February, beating estimates on strong Asia demand.

The Nikkei 225 Index surged 2.9 percent to 55,239.40, while the broader Topix Index settled 2.5 percent higher at 3,717.41.

SoftBank rallied 5.8 percent, Advantest surged 6.7 percent and Tokyo Electron added 3.9 percent after fresh announcements at Nvidia GTC 2026 fueled optimism over AI demand and next-generation computing.

Seoul stocks led regional gains after Financial Services Commission Chairman Lee Eog-weon announced a ban on double listings, a change investors hope could boost valuations.

The Kospi soared 5.0 percent to 5,925.03, extending gains for a third straight session. A five-minute trading halt was activated earlier after the Kospi 200 futures surged 5 percent. Shares of tech heavyweight Samsung Electronics spiked 7.5 percent and SK Hynix jumped 8.9 percent.

Australian markets eked out modest gains to hit a one-week high, with mining and energy stocks pacing the gainers. The benchmark S&P/ASX 200 Index rose 0.3 percent to 8,640.60, while the broader All Ordinaries Index closed up 0.3 percent at 8,847.20.

Across the Tasman, New Zealand’s S&P/NZX-50 Index jumped 1.0 percent to close at 13,315.60, extending gains from the prior session.

Europe

European stocks are turning in a mixed performance on Wednesday ahead of the U.S. Federal Reserve’s interest rate decision later in the day.

Sentiment was underpinned as oil prices fell despite heightened geopolitical risks, with Iran’s supreme national security council confirming the death of its chief, Ali Larijani.

While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.5 percent.

British insurer Prudential fell 2.2 percent despite reporting a 12 percent rise in annual new business profit, lifting dividend and announcing a $1.3 billion capital return in 2027.

Oil & gas explorer Ithaca Energy lost nearly 6 percent after its 2025 adjusted profit was hit by one-off costs.

Diploma, the specialist distributor of industrial controls, seals and life sciences products, soared 17 percent after lifting its FY26 guidance.

Lender Barclays gained 2 percent after it announced a new strategic partnership with Sage Group.

French vaccine maker Valneva was moving lower after widening its FY25 net loss.

Technip Energies rose 1.4 percent. The global technology & engineering powerhouse leading in energy and decarbonization infrastructure has launched a share buyback program for a maximum amount of 150 million euros.

German electrolysis equipment maker Thyssenkrupp Nucera slumped 8 percent after slashing its full-year outlook.

Meal kit company HelloFresh plummeted 7 percent after it reported weaker than expected fourth-quarter core earnings and forecast lower profit in 2026.

U.S. Economic News

Producer prices in the U.S. increased by much more than expected in the month of February, according to a report released by the Labor Department on Wednesday.

The Labor Department said its producer price index for final demand advanced by 0.7 percent in February after climbing by 0.5 percent in January. Economists had expected producer prices to rise by 0.3 percent.

The report also said the annual rate of growth by producer prices accelerated to 3.4 percent in February from 2.9 percent in January. Yearly growth was expected to remain unchanged.

The Commerce Department is scheduled to release its report on factory orders in the month of January at 10 am ET. Factory orders are expected to tick up by 0.1 percent in January after falling by 0.7 percent in December.

At 10:30 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended March 13th. Crude oil inventories are expected to inch up by 0.4 million barrels.

The Federal Reserve is scheduled to announce its monetary policy decision at 2 pm ET, followed by Fed Chair Jerome Powell’s post-meeting press conference at 2:30 pm ET.