U.S. Stocks May Give Back Ground Amid Inflation Concerns

(RTTNews) - Stocks may move to the downside in early trading on Wednesday, giving back ground following the upward move seen over the two previous sessions. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.

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.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged by 2.9 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. 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.

In commodities trading, 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.