NEW YORK — U.S. markets edged higher Monday ahead of the next look at inflation levels in the U.S.
Futures for the benchmark S&P 500 index rose 0.7% and Dow inched up 0.1%.
A cooler read on Tuesday’s consumer price report may give the Federal Reserve a little more leeway in dialing down efforts to slow the economy and hiring. A strong reading after estimates of 2022 inflation were revised up last week would reinforce plans to keep rates high and possibly increase them.
A strong inflation figure “can move through risk assets like a wrecking ball,” said Stephen Innes of SPI Asset Management in a report.
Government data on retail sales comes Wednesday, and a report on inflation at the wholesale level will be released Thursday.
In European trading, the FTSE 100 in London rose 0.4% at midday, while the DAX in Frankfurt was up 0.5%. The CAC 40 in Paris climbed 0.9%.
In Asia, the Nikkei 225 in Tokyo sank 0.9% to 27,427.32 while the Shanghai Composite Index advanced 0.6% to 3,279.94. The Hang Seng in Hong Kong lost 0.4% to 21,099.65.
The Kospi in Seoul declined 0.6% to 2,453.89 and Sydney’s S&P-ASX 200 shed 0.2% to 7,417.80.
India’s Sensex opened down 0.5% to 60,386.40. New Zealand and Singapore retreated while Jakarta and Bangkok gained.
U.S. stocks have been rallying since last month on hopes the Fed might start cutting rates as early as late this year. That is despite warnings by Chair Jerome Powell that rates will stay elevated for an extended period until inflation pressures are extinguished.
Other central banks in Europe and Asia also have raised rates to cool inflation.
Wall Street raised its forecast of how high the Fed might raise rates after Powell said last week there is a “significant road ahead” to get inflation down to its 2% target. He warned against expecting inflation to “go away quickly and painlessly.”
The U.S. government revised December inflation to 0.1% over the previous month, up from the earlier estimate of a 0.1% decline. The November figure was raised to 0.2% over the previous month from 0.1%.
Traders expect Tuesday’s report to say consumer prices rose 0.5% in January over the previous month.
The yield on the 10-year Treasury bond, or the difference between the market price and the payout at maturity, widened to 3.73% on Friday from 3.66%.
The yield on the two-year Treasury ticked up to 4.50% from 4.48%. It was at 4.08% just over a week earlier and is near its highest level since November.
Equities analysts have cut forecasts of first-quarter earnings for companies in the S&P 500 by 4.5% due to the impact of inflation and slowing economic activity, according to strategists at Credit Suisse.
In energy markets, benchmark U.S. crude lost 5 cents to $79.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.66 to $79.72 on Friday. Brent crude, the price basis for international oil trading, lost 9 cents to $86.30 per barrel in London. It gained $1.89 on Friday to $86.39.
Oil prices surged Friday after Russia said it would cut production by 500,000 barrels per day next month. Western governments have imposed an upper limit on how much they will allow customers to pay for Russian crude to punish Moscow for its invasion of Ukraine.
The dollar gained to 132.41 yen from Friday’s 131.50 yen. The euro declined to $1.0696 from $1.0672.
On Friday, the S&P 500 index rose 0.2%. The index turned in a weekly loss of 1.1%, its biggest since December.
The Dow gained 0.5% and the Nasdaq fell less than 0.1%.