US stocks up as traders await inflation data

After a volatile session, US stock index futures rose on Tuesday, as investors were awaited by an inflation report that could determine whether the central bank will pause its rate hikes in March due to fears of the collapse of Silicon Valley Bank.

The Labor Department's ET 1330 GMT decision will be reflected in the US Federal Reserve's policy decision at its March meeting. Traders' bets are split between a 25 bps rate hike and a no-hike scenario.

The US Consumer Price Index CPI was expected to increase by 0.4% last month after accelerating 0.5% in January due to sticky rental housing costs, according to a poll by economists. In February, the CPI grew 6.0%, down from a 6.4% increase the previous month.

SVB Financial's sudden shutdown and fears of risks to other banks hammered the sector and broader markets in the past few days. On Monday, the Nasdaq ended higher as some sectors benefited from the hopes that the Fed could ease up on rates hikes.

The bond markets have whipsawed in response to the banking sell-off, with the market now expecting the Fed to go-slow on rate hikes or even press pause this month to restore financial stability, said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The CPI figures out later will be watched super closely as another hot reading reinforces expectations that a rate rise, albeit smaller, will be on the cards next week. The two-year Treasury yield, which best reflects interest rate expectations, fell below the 4% mark on Monday and is currently at 4.2%.

Federal Reserve Board governor Michelle Bowman is due to speak later in the day.

ET, Dow e-minis 1 YMcv 1 was up 117 points, or 0.37%, S&P 500 e-minis EScv 1 was up 16.25 points, or 0.42%, and Nasdaq 100 e-minis NQcv 1 was up 56 points, or 0.47%.

Big US banks, including JPMorgan Chase Co, Citigroup and Wells Fargo, gained between 0.5% and 2.3% after losing ground in the previous session.

Chinese stocks such as Baidu Inc, JD.Com Inc, and Alibaba Group Holdings Ltd were down around 2% as fear of a possible collapse caused by the collapse of the SVB.