U.S. stock futures rise as investors eye SVB fallout, key inflation data

By Scott Kanowsky 

Investing.com -- U.S. stocks are seen opening higher on Tuesday following a volatile previous session marked by concerns over the collapse of Silicon Valley Bank, while investors looked ahead to the release of all-important inflation data.

At 07:00 ET (11:00 GMT), the Dow futures contract was up 102 points or 0.32%, S&P 500 futures traded 13 points or 0.34% higher, and Nasdaq 100 futures climbed 130 points or 0.26%.

The downfall of SVB has hit the banks - and regional players in particular - hard despite regulators providing the sector with emergency liquidity and reassurances of support. The impact has subsequently spread to other parts of the market, although the tech-heavy Nasdaq ended Monday in the green as traders made bets on a possible slowdown in Federal Reserve interest rate hikes.

Focus is now on U.S. consumer price index inflation data, due later in the day, for more cues on how the Fed could potentially proceed with monetary policy. Fed Fund futures prices show that markets have abandoned bets on a 50 basis point hike by the Fed next week, with a majority of traders now positioning for a 25 bps raise.

Federal Reserve Board governor Michelle Bowman is also set to speak today.

Stocks in the U.S. are receiving a mixed handover from Europe. The regional Stoxx 600 is trading marginally higher, although it still faces downward pressure from banking stocks.

Earlier, Japan's Nikkei 225 index dropped by over 2%, as markets fretted over the exposure Japanese financial firms have to U.S. bonds. Other bank-heavy indexes also logged heavy losses, with South Korea's KOSPI down over 2%, while Indonesia's Jakarta Stock Exchange Composite Index led losses across Southeast Asia with a 2.1% dip.

China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes lost 0.6% and 0.7% respectively, while Hong Kong's Hang Seng index slid 2.2% as optimism over more government stimulus measures was largely offset by heavy selling in local bank stocks.

In corporate news, regional U.S. banks will likely remain in the spotlight. Shares in these lenders steadied in premarket trading but managed only a weak rebound after a warning about their credit rating.

Elsewhere, oil markets declined with traders gauging the upcoming inflation data and the fallout from the crisis surrounding the failure of SVB. U.S. crude futures traded 2.01% lower at $73.30 a barrel, while the Brent contract moved down by 1.61% to $79.47 a barrel.

Additionally, gold futures fell 0.47% to $1,908.85/oz, while EUR/USD traded 0.14% lower at 1.0713.