U.S. Stocks May See Initial Strength Following Inflation Data

(RTTNews) - After recovering from an initial pullback to end the previous session modestly higher, stocks may see further upside in early trading on Tuesday. The major index futures are currently pointing to a slightly higher open for the markets, with the S&P 500 futures up by 0.1 percent.

The futures edged higher following the release of the Labor Department's closely watched report on consumer price inflation in the month of December.

While the report showed consumer prices increased in line with economist estimates, core consumer prices rose by slightly less than expected.

The Labor Department said its consumer price index climbed by 0.3 percent in December, matching economist expectations.

Excluding food and energy prices, core consumer prices rose by 0.2 percent in December. Economists had expected core prices to rise by 0.3 percent.

The report also said the annual rate of growth by consumer price came in at 2.7 percent in December, unchanged from 2.7 percent in November and in line with estimates.

The annual rate of growth by core consumer prices was also unchanged from the previous month at 2.6 percent, while economists had expected an uptick to 2.7 percent.

The report may add to recent optimism about the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.

While the Fed is widely expected to leave interest rates unchanged at its January meeting, the central bank is still seen as likely to cut rates by at least another quarter point in the coming months.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of October. New home sales are expected to come in at an annual rate of 710,000.

Stocks moved to the downside at the start of trading on Monday but showed a notable recovery over the course of the session. The major averages climbed well off their lows of the session and into positive territory, with the Dow and the S&P 500 reaching new record closing highs.

The major averages pulled back off their best levels going into the close but remained positive. The Dow rose 86.13 points or 0.2 percent to 49,590.29, the Nasdaq climbed 62.56 points or 0.3 percent to 23,733.90 and the S&P 500 increased 10.99 points or 0.2 percent to 6,977.27.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan's Nikkei 225 Index surged by 3.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the U.K.'s FTSE 100 Index is just below the unchanged line and the French CAC 40 Index is down by 0.2 percent.

In commodities trading, crude oil futures are surging $1.15 to $60.65 a barrel after climbing $0.38 to $59.50 a barrel on Monday. Meanwhile, after soaring $113.80 to $4,614.70 an ounce in the previous session, gold futures are inching up $8.10 to $4,622.80 an ounce.

On the currency front, the U.S. dollar is trading at 158.87 yen compared to the 158.15 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1661 compared to yesterday's $1.1667.