US stocks are rising ahead of key inflation data that will help set the Fed's interest rate plans

Lucas Jackson/Reuters

• U.S. stocks rose on Tuesday as investors await a key inflation report for March.

• The CPI report is due to be released on Wednesday and investors expect inflation to slow further.

• Bond yields fell after rising last week as investors adjusted their interest rate outlook.

U.S. stocks rose slightly on Tuesday as investors await a key inflation report later this week.

The March consumer price index report is due out Wednesday morning, and investors expect inflation to decline further. Current estimates suggest core CPI will decline to 3.7% year-on-year, compared to the previous reading of 3.8%, while core CPI is expected to decline to 0.3% month-on-month, compared to the previous value of 0.4%.

The March CPI report will provide insight into when the Federal Reserve might cut interest rates. Current forecasts suggest about a 50-50 chance that the first rate cut will come at the Fed's June FOMC meeting, but an inflation report that falls outside consensus estimates would significantly impact those probabilities.

“It is precisely because US labor market indicators are so ambiguous that US inflation data is so much more important as a driver of the Fed's policy outlook over the next few months. “Tomorrow’s March CPI report will be of utmost importance,” Macquarie strategist Thierry Wizman said.

Bond yields fell, with the 10-year Treasury note slipping four basis points to 4.384%.

Here's where the US indices stood shortly after the opening bell at 9:30 a.m. on Tuesday:

Find out what else is going on today here:

The story goes on

For commodities, bonds and crypto:

• West Texas Intermediate crude fell 0.07% to $86.37 a barrel. Brent crude, the international benchmark, rose 0.11% to $90.48 a barrel.

• Gold rose 0.78% to $2,369.40 an ounce.

• The 10-year Treasury yield fell four basis points to 4.384%.

• Bitcoin fell 1.63% to $70,460.

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