U.S. stock index futures rose on Wednesday, paving the way for fresh gains on Wall Street, as an encouraging inflation report fueled hopes U.S. interest rates have peaked.
The benchmark S&P 500 and the tech-heavy Nasdaq posted their biggest daily percentage gains in more than six months on Tuesday as softer-than-expected consumer prices data supported the view that the U.S. Federal Reserve was done raising interest rates.
Money market futures suggest traders have priced in a 95% chance the U.S. central bank will keep rates steady in December, as per CME Group's Fedwatch tool. They also see the first rate cut of the cycle to kick off in May 2024.
Investors will focus on fresh data, due at 8:30 a.m. ET (1330 GMT), which is expected to show producer prices rose 1.9% in October from last year, slowing from a 2.2% increase in September.
Separately, retail sales are expected to have slipped 0.3% on a month-over-month basis in October after 0.7% increase in September.
Focus will also be on meeting between U.S. President Joe Biden and Chinese leader Xi Jinping for the first time in a year on Wednesday, for talks that may ease friction between the adversarial superpowers on military conflicts, drug-trafficking and artificial intelligence.
At 5:23 a.m. ET, Dow e-minis were up 66 points, or 0.19%, S&P 500 e-minis were up 11.75 points, or 0.26%, and Nasdaq 100 e-minis were up 67 points, or 0.42%.
Further aiding the mood, the U.S. House of Representatives passed a temporary spending bill that would avert a government shutdown, with broad support from lawmakers in both parties.
To prevent a shutdown, the Senate and Republican-controlled House must enact a legislation that President Joe Biden can sign into a law before current funding for federal agencies expires at midnight on Friday.
Among single stocks, Target rose 2.9% premarket ahead of its third-quarter results.
U.S.-listed shares of Chinese ecommerce firm JD.com climbed 3.9% after the company posted a surge in profit as supply chain challenges eased.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shinjini Ganguli)