Dow Jones set for cautious start as Gulf shipping attacks support oil prices

8.44am: CPI in line, futures a little worse

US futures were little-changed after the CPI release, as inflation data broadly matched expectations.

Headline CPI rose almost 0.3% month-on-month and 2.4% year-on-year, matching forecasts. On an unrounded basis, CPI was up 0.267% on the month, up from 0.171% in January.

Core inflation increased 0.2% on the month and 2.5% annually, also in line with consensus. Unrounded core CPI grew 0.216% on the month, down from 0.295%.

The largely unchanged readings suggest underlying price pressures remained stable heading into the recent surge in energy prices.

Dow futures are down 0.3%, while S&P 500 and Nasdaq futures are down around 0.15%.

8.15am: Wall Street futures flat on Wednesday

US futures were pointing to a cautious open to Wedneday trading on Wall Street, ahead of the release of US inflation data, as escalating attacks on shipping in the Strait of Hormuz keep oil prices elevated and nerves frayed across global markets.

Dow Jones, S&P 500 and Nasdaq futures were all down around 0.1% to 0.15% ahead of February's consumer price index release.

European stocks were under heavier pressure, with London's FTSE 100 down 0.9% and Germany's DAX off 1.4%, led lower by exporters, defence stocks and miners.

It is difficult for stocks to make any headway with bond market volatility running at unprecedented levels, said XTB analyst Kathleen Brooks, adding that "we are living through a period of high volatility right now."

Oil is back on the rise, with WTI up over 3% at $86.63 a barrel after a second vessel was struck by a projectile in the Strait of Hormuz overnight, forcing its crew to evacuate.

Saudi Arabia said it had intercepted seven drones targeting a strategic oil field, while the US said it destroyed 16 Iranian mine-laying vessels in the waterway yesterday.

If Gulf shipping routes remain impassable, Brooks warned that the inflationary impact extends well beyond fuel, with fertiliser, food and industrial inputs all at risk.

Agricultural commodity prices have already moved sharply, with cocoa up nearly 20% this month, and coffee and wheat both around 5% higher.