US stock futures tread water ahead of big bank Q3 earnings as investors weigh up inflation prospects

• US stock futures were mostly flat Wednesday, with JPMorgan set to lead out the Q3 earnings season.
• Corporate outlooks will be watched for pullbacks due to supply-chain issues, higher energy and labor costs, and stalling growth.
• Investors are waiting for US consumer price data and minutes from the Federal Reserve's September policy meeting.

US stock futures trod water on Wednesday as investors waited for the earnings season kickoff and for a consumer price update, in focus to see whether the inflation concerns that have weighed on markets are justified.

Futures on the Dow Jones rose 0.1%, while those on the S&P 500 were up 0.2%. Nasdaq futures rose 0.5% as of 5:35 a.m. ET, after edging down earlier in premarket, suggesting a tepid start to trading later in the day. All three major stock indexes closed lower Tuesday.

Reports from JPMorgan Chase, Delta Air Lines, BlackRock, and First Republic Bank are scheduled to get the third-quarter earnings season underway Wednesday.

Investors will examine corporate heavyweights' outlooks for the next quarter and next year for signs they are lowering their sights due to supply-chain issues, higher energy and labor costs, and higher inflation.

The prospect of hot inflation running alongside stalled economic growth has weighed on markets recently, as a surge in energy prices fuels concerns that higher inflation may be less transitory than seen by the Federal Reserve.

The International Monetary Fund cut its 2021 estimates for US economic growth on Tuesday. It also said central banks that have held off from tightening monetary policy should be prepared to act fast to reverse course if high inflation persists.

The latest reading on US consumer price inflation and the minutes from the Fed's September policy meeting are both due later Wednesday. The September CPI data is the last inflation indicator Fed officials will get ahead of their next policy decision in November, when many investors expect the central bank to start winding down its asset purchases.

"With equities so heavily priced towards a linear post-pandemic recovery, and with the Fed looking increasingly likely to withdraw the easy money punch bowl, we can expect a lot more two-way volatility in equity markets in Q4," Jeffrey Halley, a senior market analyst at OANDA, said in a note.

In Asia, equity markets traded mixed. Official data Wednesday showed Chinese export staged an impressive rebound in September with a rise of 28.1% on a year ago, as global demand offset supply pressures from factory power outages and a re-emergence of COVID-19 cases.

The Shanghai Composite rose 0.4%, and Tokyo's Nikkei lost 0.3%. Trading in Hong Kong was closed Wednesday due to a typhoon warning.

In Europe, London's FTSE 100 fell 0.2%. Official figures showed UK gross domestic product grew 0.4% in August after slipping in July. The pan-Europe Euro Stoxx 600 was up 0.4%, while Frankfurt's DAX rose 0.6%. On Tuesday, the IMF revised its growth outlook for Spain and Germany, cutting each by 0.5 percentage points.

Oil prices remained at the top of recent ranges, with a slightly higher US dollar tempering gains. The dollar index was last at 94.35, just under Tuesday's high of 94.56, the highest since September 2020.

Brent crude slipped 0.3% to $83.16 a barrel, and West Texas Intermediate lost 0.2% at $80.42 a barrel.

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