Wall Street starts day higher on crude oil rebound and US data

Major equity indexes in the U.S. opened higher on Wednesday as rising crude oil prices lifted energy shares and the disappointing PCE data from the U.S. increased the odds of the Federal Reserve refraining from making another rate hike this year.

The core personal consumption expenditures (PCE) price index, the Fed’s favorite inflation gauge, eased to 1.4% in the 12 months through July from 1.5% in June, recording its lowest yearly advance since the end of 2015. The CME Group FedWatch tool shows that markets are now pricing a 35.7% probability of a 25 bps rate hike in December. A month ago, the probability was around 43%. Now with today's data out of the way, investors will be waiting for the critical nonfarm payroll report, which will be released tomorrow in the early NA session.

On the other hand, after closing the last three days with heavy losses, crude oil prices are recovering on Thursday with the barrel of West Texas Intermediate now trading at $47.10, up 2.5% on the day.

“We do anticipate the overall market reaction to remain reticent ahead of the jobs data due tomorrow,” Naeem Aslam, chief market analyst at Think Markets UK, told Reuters.

As of writing, the Dow Jones Industrial Average was up 65 points, or 0.3%, at 21,957.45, the S&P 500 was gaining 11 points, or 0.45, at 2,467.12 and the Nasdaq Composite was adding 34.85 points, or 0.55%, at 6,403.16.

Today's data from the U.S.

• US: Personal income increased $65.6 billion (0.4%) in July
• US: Weekly initial claims was 236,000, an increase of 1,000 from previous week
• US-based employers announced plans to cut payrolls by 33,825 in August
• US: Pending home sales lessen 0.8% in July
• US: August Chicago Business Barometer stayed unchanged at 58.9