March 12 (Reuters) - Wall Street's main indexes were set for a higher open on Wednesday after data showed cooling inflation, although concerns about the economic impact of U.S. President Donald Trump's trade policies tempered optimism.
Data from the U.S. Department of Labor showed the Consumer Price Index rose 2.8% on an annual basis in February versus the 2.9% increase forecast by economists polled by Reuters. On a monthly basis, the index rose 0.2%, compared to an estimated 0.3% rise.
The core figure, which excludes the volatile food and energy components, rose 0.2% on a monthly basis against an expectation of a 0.3% advance. Annually, it rose 3.1%, versus an estimated 3.2% increase.
"This data is pointing in the right direction for the market to be really happy," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
"It's going to take a very long time in economic terms, maybe six to nine months, to see the impact of Trump's tariffs," Forrest said.
Traders remain confident that the Fed will deliver its first 25-basis-point interest-rate cut in June, according to data compiled by LSEG data. The central bank is largely expected to leave borrowing costs unchanged at its meeting next week.
Rate-sensitive lenders such as Bank of America (BAC.N),and Goldman Sachs (GS.N),added 1.6% and 1.9%, respectively, in premarket trading, with growth stocks also advancing. Tesla (TSLA.O),rose 5.9% and Nvidia (NVDA.O),gained 4.1%.
On the trade front, Trump's 25% protectionist tariffs on all steel and aluminum imports kicked in on Wednesday, drawing swift retaliation from Canada and the European Commission.
Companies that integrate steel and aluminum within their supply chains such as Ford (F.N),and General Motors (GM.N),were marginally higher, while Carrier Global (CARR.N),rose 1.2%.
At 08:46 a.m. ET, Dow E-minis were up 224 points, or 0.54%, S&P 500 E-minis were up 56 points, or 1.0%, and Nasdaq 100 E-minis were up 279.25 points, or 1.44%.
The financial markets have been upended after Trump's unpredictable tariff strategy, with analysts warning of a potential capital flight from Wall Street. Concerns are rife that the new U.S. levies could fuel domestic inflation and possibly precipitate a recession.
The tech-driven Nasdaq (.IXIC),entered correction territory last week, while the benchmark S&P 500 (.SPX),narrowly avoided confirming a 10% decline from its February peak in the previous session.
The uncertainty has led businesses to scale back investments and adjust forecasts downwards. Delta (DAL.N), opens new tab, Kohl's (KSS.N), opens new tab, and Walmart (WMT.N),are among the latest companies to announce forecast cuts.
Goldman Sachs became the first brokerage to lower its 2025-end target for the benchmark index to 6,200 from 6,500, while J.P.Morgan sees a roughly 40% risk of recession, up from a 30% chance at the start of the year.
Among other movers, Intel (INTC.O),jumped 5.3% after a report said TSMC (2330.TW),has pitched Nvidia, Advanced Micro Devices and Broadcom about taking a stake in a joint venture to operate the U.S. chip company's factories.
The Republican-controlled U.S. House of Representatives passed a stopgap bill to keep federal agencies funded beyond Friday, giving markets a breather.
Reporting by Johann M Cherian and Pranav Kashyap in Bangalore; Editing by Pooja Desai
