Here are the most important news, trends and analysis that investors need to start their trading day:
1. Futures steady ahead of inflation data, Powell testimony
U.S. stock futures were flat Wednesday, and the 10-year Treasury yield was around 1.4% — ahead of the 8:30 a.m. ET release of the government’s latest inflation report and Federal Reserve Chairman Jerome Powell‘s noon ET testimony before a House panel. The Dow Jones Industrial Average, S&P 500 and Nasdaq on Tuesday all retreated from record closes, breaking two-session winning streaks.
The day after hot June numbers on consumer prices, economists expect the PPI for last month to show a 0.6% rise in headline wholesale inflation and a 0.5% advance in the ex-food and energy rate. Powell follows Wednesday’s appearance before the House Financial Services Committee with testimony on Thursday morning before Senate Banking Committee.
2. Financial firms continue to report earnings this week
Bank of America shares dropped 2% in the premarket after the company on Wednesday morning posted second-quarter revenue below expectations. It’s not immediately clear how earnings of $1.03 per share, including a one-time $2 billion tax benefit, stacked up compared to the 77- cent per-share estimate.
BlackRock, the world’s largest asset manager, reported Wednesday morning a 28% jump in second-quarter earnings that handily beat estimates. Investors poured more money into the company’s funds, boosting its assets under management 30% year over year to nearly $9.5 trillion. Shares fell around 1.4% in the premarket.
3. Airline stocks rise on promising quarterly results
Delta Air Lines on Wednesday morning reported second-quarter revenue that topped estimates, saying both leisure and business travel bookings rose sharply. The Atlanta-based airline posted a profit of $652 million, snapping a five-quarter streak of losses, thanks to federal coronavirus aid that offset some of its costs. Shares rose nearly 2% in premarket trading.
American Airlines shares rose more than 3% in Wednesday’s premarket, the morning after the carrier forecast better revenue and reported a narrower loss than previously estimated for the second quarter. It’s the latest sign that airlines are recovering from the coronavirus pandemic’s toll on travel.
4. Hospitalizations rising again as delta variant spreads
The spread of the Covid delta variant across unvaccinated pockets of the U.S. is causing flare-ups in cases and leading to increases in hospitalizations, according to infectious disease specialists. New daily Covid infections are once again on the rise as the highly transmissible delta variant, first detected in India, takes hold as the dominant strain in the U.S. Cases are rising in Missouri, Arkansas, Nevada, Utah and Florida at higher rates than in other states over the past couple of weeks.
5. Senate Democrats reach $3.5 trillion budget deal
President Joe Biden on Wednesday was set to meet with Senate Democrats on Capitol Hill to talk about their budget agreement among their caucus. The accord announced Tuesday night envisions spending $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into climate change initiatives, as well as health care and family service programs sought by Biden. It’s not clear whether Democrats have all member on board in the spilt Senate. Moderates like Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., might still demand further changes.
— Reuters and The Associated Press contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.