US STOCKS-Wall St set to open higher as US inflation cools, but slowdown fears loom

By Johann M Cherian and Pranav Kashyap

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 1YMcv1 were up 224 points, or 0.54%, S&P 500 E-minis EScv1 were up 56 points, or 1.0%, and Nasdaq 100 E-minis NQcv1 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, Kohl's KSS.N, 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.