Wall St edges higher in turbulent trading after inflation data

By Bansari Mayur Kamdar and Shashwat Chauhan

(Reuters) -Wall Street's main stock indexes struggled for direction on Tuesday, as traders held on to bets of rate cuts by the Federal Reserve in the coming months, even as consumer prices data came in hotter than expected.

A Labor Department report showed U.S. consumer prices increased in February amid higher gasoline and shelter costs, suggesting some stickiness in inflation that could delay an anticipated June interest-rate cut from the Federal Reserve.

The Consumer Price Index (CPI) rose 0.4% last month after climbing 0.3% in January. Excluding volatile food and energy components, consumer prices increased 0.4% in February after rising by the same margin in January.

"The disinflationary trend is petering out, but inflation is not resurging," said Seema Shah, chief global strategist at Principal Asset Management.

"This print is just about enough to keep rate-cut expectations for June stable - but another print like this next month would push the first cut into the second half of the year, putting the soft landing narrative in question."

Traders are now seeing a 70% chance of the first rate cut coming in June, according to the CME FedWatch Tool, from 71% ahead of the inflation report.

Last month's stock market rally was slowed after data showed signs of a robust economy and sticky inflation, as traders pushed back expectations on the timing of the Fed's first rate cut to June from March.

At 9:54 a.m. ET, the Dow Jones Industrial Average was up 3.64 points, or 0.01%, at 38,773.30, the S&P 500 was up 8.10 points, or 0.16%, at 5,126.04, and the Nasdaq Composite was up 24.31 points, or 0.15%, at 16,043.59.

Utilities led losses across major S&P 500 sectors, down 0.4%, while a 0.5% rise in rate-sensitive technology stocks helped crimp losses.

Oracle jumped 10.7% on signs the firm was making progress in its plan to grab a share of the cloud-computing market, thanks to its tie-up with AI chip giant Nvidia.

Boeing shed 4.1% after a report said an audit by the Federal Aviation Administration found dozens of problems with the 737 MAX's production.

Southwest Airlines dipped 12.9% after saying it expects 42% less MAX deliveries this year from Boeing than previously estimated, which will likely result in a cut in its 2024 capacity.

3M jumped 5.8% after the industrial conglomerate said that William Brown would be appointed its chief executive officer, effective May 1.

Declining issues outnumbered advancers for a 1.43-to-1 ratio on the NYSE and for a 1.59-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and no new lows, while the Nasdaq recorded 22 new highs and 57 new lows.

(Reporting by Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Rashmi Aich and Pooja Desai)