NEW YORK -- Wall Street futures pointed toward a lower open before the bell on Wednesday, one day after rallying to its best day in more than three weeks as companies reported strong profits for the past quarter.
Futures for the Dow Jones Industrial Average slipped 0.3%, as did futures for the S&P 500.
After Tuesday's surge, U.S. markets are poised for the best month of what has been a grim year on Wall Street.
“The bear market rally looks well and truly back on track this week,” Jeffrey Halley of Oanda said in a commentary.
Stocks have sagged this year on worries about rising interest rates and high inflation. Strong earnings would provide a major support for markets that have been on edge over rate hikes.
The Federal Reserve has already raised rates three times this year, and by increasing amounts each time. It will announce its next increase next week, and the only question among investors is whether it will go with another increase of 0.75 percentage points or a colossal hike of a full point.
Shares in Asia followed Wall Street’s Tuesday rally higher, but European markets fell on more gloomy inflation data from the United Kingdom and the likelihood that the European Central Bank will raise rates later this week.
New data Wednesday showed that inflation in the United Kingdom accelerated to a new 40-year high, driven by rising food and fuel prices that are contributing to a cost-of-living crisis.
Consumer prices rose 9.4% this year through June, up from 9.1% the previous month, the Office for National Statistics said Wednesday.
Bank of England Governor Andrew Bailey said Tuesday that the bank is likely to consider raising interest rates by half a percentage point at its next meeting to help control inflation. The bank has raised rates five times since December, with the last increase a quarter-point in June that sent its key rate to 1.25%.
The European Central Bank is expected to raise interest rates on Thursday for the first time in 11 years in hopes of knocking down high inflation.
In Europe at midday, Britain's FTSE 100 slipped 0.5%, Germany’s DAX lost 1% and the CAC 40 in Paris fell 0.5%.
Japan’s central bank also meets this week but is not expected to make any major policy changes.
China’s central bank kept its loan prime rate steady on Wednesday despite the latest data showing a significant slowdown in growth in the past quarter, when pandemic-related shutdowns in many cities idled businesses and other activity.
“This comes as economic reopening continues to take place albeit at a slower pace, potentially leading to some near-term wait-and-see on economic progress before delivering further cuts ahead,” Jun Rong Yeap of IG said in a commentary.
In Asia, Tokyo’s Nikkei 225 jumped 2.7% to 27,680.26, while the Hang Seng in Hong Kong gained 1.1% to 20,890.22. In Seoul, the Kospi added 0.7% to 2,386.85. Australia’s S&P/ASX 200 climbed 1.7% to 6,759.20, while the Shanghai Composite index rose 0.8% to 3,304.72.
Shares also rose in India and Taiwan.
Tesla is among the companies due to release quarterly earnings on Wednesday.
In other trading, U.S. benchmark crude oil lost $1.98 to $102.24 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard for pricing, lost $2.11 to $105.24 per barrel.
The U.S. dollar slipped to 138.12 Japanese yen from 138.18 yen. The euro dipped to $1.0182 from $1.0231.
On Tuesday, the S&P 500 climbed 2.8% while the Dow Jones Industrial Average jumped 2.4%. The Nasdaq roared 3.1% higher while the Russell 2000 surged 3.5%.
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