By Sruthi Shankar and Ankika Biswas
(Reuters) -Wall Street's main indexes were on track for a subdued open on Tuesday as investors kept an eye out for inflation data that could determine the U.S. Federal Reserve's next policy moves.
Hopes that the Fed will soon end its aggressive monetary policy tightening have helped the benchmark S&P 500 stabilize so far in April after the collapse of two U.S. mid-sized lenders sparked a selloff last month.
A strong labor market report on Friday, however, lifted bets that the U.S. central bank will increase rates by 25 basis points in May, with money market traders pricing in a nearly 70% chance of such a move, according to CME Group's (NASDAQ:CME) Fedwatch tool.
This marks a shift in traders' bets of a pause in the Fed's policy tightening after recent weak economic data raised the possibility of a U.S. recession.
"There are certainly other macro indicators that show the labor market is slowing, and if we get good news on inflation, then there's a good possibility that the Fed pauses in May," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"We are headed for a recession and I think it'll be a light one."
Data on Wednesday is expected to show consumer prices grew 5.2% in March after a 6.0% rise in February. However, core prices are seen rising 5.6%, at a slightly faster pace compared with a 5.5% rise in February.
Investors will also be scrutinizing earnings reports from the big U.S. banks such as Citigroup Inc (NYSE:C), JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo (NYSE:WFC) & Co on Friday for clues on the overall health of the banking sector.
Analysts expect first-quarter profits at S&P 500 companies to fall 5.2% year-on-year, a stark reversal from the 1.4% annual growth expected at the beginning of the year, according to Refinitiv data.
At 8:45 a.m. ET, Dow e-minis were up 24 points, or 0.07%, S&P 500 e-minis were up 4.25 points, or 0.10%, and Nasdaq 100 e-minis were down 2.25 points, or 0.02%.
Remarks later on Tuesday from voting members of the Fed's rate-setting committee will be parsed for more clues on the central bank's policy moves.
Shares of crypto-related companies such as Coinbase (NASDAQ:COIN) Global Inc, Riot Platforms Inc and Marathon Digital Holdings Inc climbed between 2.8% and 4.3% in premarket trade as bitcoin breached the key $30,000 level for the first time in 10 months.
U.S.-listed shares of Hexo Corp plunged 22.6% after Tilray Brands Inc said it would buy the Canadian cannabis company for $56 million. Tilray's shares also fell 6.6%.
CarMax Inc (NYSE:KMX) rose 6.1% as the used-car retailer reported a quarterly profit that beat estimates.