Futures steady ahead of crucial inflation data

[April 12, 2022]   (Reuters) - U.S. stock index futures were largely flat on Tuesday ahead of key inflation data that is likely to seal the case for a 50 basis points interest rate hike in May by the Federal Reserve as it amps up its battle against surging prices.

Flags are seen outside the New York Stock Exchange (NYSE) in New York City, in New York, U.S., February 24, 2022. REUTERS/Caitlin Ochs/File Photo

The Labor Department's report, due at 8:30 a.m. ET, is expected to show consumer prices shot up to 8.4% in the 12 months through March, compared with 7.9% in February, as Russia's invasion of Ukraine drove gasoline costs to record highs.

Traders have raised bets of bigger interest rate hikes this year, driven by a spike in commodity prices from the Ukraine conflict, a tight labor market and recent hawkish comments from Fed policymakers.

Money markets see a 93.5% likelihood of a 50 basis point rate hike at the central bank's meeting next month. [IRPR]

Rate-sensitive banks such as Wells Fargo & Co, Bank of America Corp and Citigroup Inc inched higher in premarket trading.

Surging Treasury yields have triggered a rout in growth stocks in the recent weeks, with the tech-heavy Nasdaq now down 14.3% so far this year, leading losses among the three major U.S. indexes.

The benchmark U.S. 10-year Treasury yield rose to new highs above 2.80%, levels last seen late 2018, on unease that an aggressive policy response to inflation from the Fed could undermine economic growth. [US/]

At 06:47 a.m. ET, Dow e-minis were up 6 points, or 0.02%, S&P 500 e-minis were up 2.75 points, or 0.06%, and Nasdaq 100 e-minis were up 23.75 points, or 0.17%.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila)

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