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Futures contracts on US stock indices were steady on Wednesday, after highly anticipated US consumer price inflation data the previous day proved more neutral than expected.
Month-on-month, consumer inflation rose 0.6% in March, which was the largest increase since August 2012, but as the data was almost in line with the expected 0.5% increase, markets perceived this as a positive and something that was unlikely to persuade the Federal Reserve to change course with monetary policy.
US 10-year benchmark yields were last up two basis points around 1.639% on Wednesday, after having fallen to as low as 1.62% on Tuesday. Yields have risen steadily this year to reach their highest since last January, in part thanks to an expectation that a rise in inflation, together with economic growth, might encourage the Fed to raise interest rates sooner than currently expected.
"This would appear to suggest that for all the recent concerns about rising inflationary pressure, the general consensus would appear to be that for now it is being considered transitory," Michael Hewson, chief market analyst at CMC Markets, said.
An auction of US 30-year bonds went smoothly overnight, meeting good investor demand, which helped keep yields in check. "With 3-year, 10-year and 30-year auctions all successfully concluding this week, the flame of a steeper yield curve has lessened markedly." Jeffrey Halley, senior market analyst at OANDA, said.
After the S&P 500 closed at a record high the previous day, S&P 500 futures edged 0.1% higher on Wednesday. Nasdaq 100 futures similarly gained 0.1%, whereas Dow Jones futures were flat on the day.
The pause in the rollout of the Johnson & Johnson COVID-19 vaccine in the US had little impact on the broader stock market. White House officials said this would not cause issues for reaching President Biden's vaccination targets.
"The J&J vaccine isn't a pivotal one for the overall US supply," Jim Reid, Deutsche Bank strategist said. "The bigger question is perhaps how this affects vaccine attitudes, particularly after the blood clot issues that also took place with the AstraZeneca vaccine, and whether take-up more broadly will be affected." A number of European countries briefly halted deployment of AstraZeneca's vaccine over concerns about its potential link to a rare blood-clot condition.
In Japan, the slow rollout of the vaccine dragged on the Nikkei 225, which was down 0.4% at the close. Investors appear concerned about the implications of the slow vaccine distribution on economic recovery, as it may delay its economy in getting back to normality.
The Hang Seng index edged 1.4% higher in Hong Kong, while China's Shanghai Composite gained 0.6%.
European stocks broadly edged higher on Wednesday, with the exception of the German DAX which was flat after a recent series of all-time high closes. London's FTSE 100 was up 0.1%, as was the pan-European Euro Stoxx 600, despite mixed progress with Covid-19 vaccination campaigns and the emergence of a third wave of infections across the region.
Both WTI and Brent crude oil futures inched higher, by 1.6% and 1.5% respectively as OPEC increased its demand projections for 2021.
Meanwhile, crypto exchange platform Coinbase will trade publicly on Wednesday. Each share will be valued at $250 on the Nasdaq, which gave the cryptocurrency complex a boost.
After hitting a new record high on Tuesday, bitcoin extended gains on Wednesday to reach a new high above $64,000.
Investors will also be keeping an eye on the first of the quarterly results in the coming days, with JPMorgan, Wells Fargo and Goldman Sachs opening earnings season.
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