Producer prices, retail sales, Adobe earnings: 3 things to watch

By Liz Moyer

Investing.com -- Stocks were clinging to gains with a half-hour of trading left in the session Tuesday, fueled higher by rallying bank stocks as worries about a contagion in the sector after the weekend collapses of Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) eased.

Tuesday's inflation reading, in the form of the consumer price index for February, came in mostly as expected. The numbers show prices continue to rise, but at a slower pace, though the core number rose slightly more than expected for the month. That leaves the Federal Reserve in a tough spot.

Before the weekend banking crisis -- spurred by rising rates that caught Silicon Valley Bank (NASDAQ:SIVB) in a spot where it was selling securities at a loss -- the expectation had been that the Fed would raise rates by a half a percentage point next week. That's because of hotter-than-expected data on jobs, and comments by Fed Chair Jerome Powell during his semiannual Congressional testimony.

But the realization that rates are pressuring bank investment portfolios has changed the thinking on next week's action by the Fed. It is now expected to raise rates by a quarter of a percentage point, or even leave them as is. And traders are also projecting that the benchmark rate won't reach as high as they were forecasting just a couple of weeks ago.

More data on producer prices and retail sales are due out on Wednesday.

Here are three things that could affect markets tomorrow:

1. Producer prices

The PPI is expected to show a 5.4% annualized gain for February, and a 0.3% gain for the month. The core PPI is expected to rise 5.2% for the year through February and 0.4% for the month. The data are expected out at 8:30 ET (12:30 GMT).

2. Retail sales

Retail sales for February are due out also at 8:30 ET. Analysts expect the monthly figure to show a drop of 0.3% compared with January's 0.3% gain.

3. Adobe earnings

Adobe Systems Incorporated (NASDAQ:ADBE) is expected to report earnings per share of $3.68 on revenue of $4.6 billion.