NEW YORK, July 13 —Wall Street was set to open higher today after producer prices data provided further evidence of inflation cooling in the world’s largest economy, and stoked hopes that the Federal Reserve will soon end its monetary policy tightening.

A Labour Department report showed the producer prices index (PPI) cooled to 0.1 per cent in June from 0.9 per cent in May. Economists polled by Reuters expected producer inflation to have eased to 0.4 per cent.

"This is further confirmation that inflation in the pipeline is beginning to wane,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

Traders continue to expect a 21 per cent probability that the central bank will hike borrowing costs in its November meeting.

Markets have fully priced in a 25-basis-point rate hike later in July.

Rate-sensitive megacap growth names like Apple and Alphabet added 0.6 per cent and 1.6 per cent, respectively, in premarket trading.

Slightly weighing on sentiment, a Labor Department report showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, indicating that the labor market remains tight

Yesterday, the Nasdaq and the S&P 500 closed at over a year’s high, with megacap stocks leading gains after the CPI report showed consumer prices registered their smallest annual increase in more than two years.

At 08:45 a.m. ET, Dow e-minis were up 70 points, or 0.2 per cent, S&P 500 e-minis were up 17.25 points, or 0.38 per cent, and Nasdaq 100 e-minis were up 114.5 points, or 0.74 per cent.

As US inflation cools and growth remains resilient, bullish investors are now counting on the second-quarter earnings season to provide more fuel for the rally in stocks.

"The market is in a position to continue to rally, but as the flow of earnings hits Wall Street, investors will be very closely watching forecast rather than results,” said Cardillo.

PepsiCo added 2.4 per cent on raising its annual revenue and profit forecasts for the second time, banking on resilient demand for its snacks and beverages as well as price hikes.

Delta Air Lines gained 3.9 per cent after it lifted its full-year profit outlook following stronger-than-expected second-quarter earnings on a relentless post-pandemic travel boom.

Other airlines including American Airlines, United Airlines and Southwest Airlines added between 2.2 per cent and 2.7 per cent.

Overall, earnings for the S&P 500 constituents are expected to have dropped 6.4 per cent in the second quarter, Refinitiv data showed.

Among other movers, Walt Disney rose 0.7 per cent after the film conglomerate’s board extended Chief Executive Officer Robert Iger’s contract by two years.

Meta Platforms, which recently launched Twitter-rival Threads, outpaced gains among big growth stocks, adding 1.4 per cent. It is set to release a commercial artificial intelligence (AI) model, as per a report.

Markets will parse remarks by policymakers during the day, including Fed Board Governor Christopher Waller, to gauge the tone of the central bank on monetary policy tightening. — Reuters