U.S. stock benchmarks pointed to further gains on Wednesday after a report on consumer inflation mostly matched expectations.

How are markets trading?

Dow Jones Industrial Average futures
YM00,
+0.29%

rose 66 points to 35,221, a gain of 0.2%.

S&P 500 futures
ES00,
+0.25%

were trading 0.1% higher, up 4.35 points, at 4,435.25.

Nasdaq-100 futures
NQ00,
+0.37%

climbed 40 points, or 0.3%, to 15,084.50.

On Tuesday, the Dow 
DJIA,
+0.46%

rose 162.82 points, or 0.5%, to close at 35,264.67, the S&P 500
SPX,
+0.10%

gained 4.40 points, or 0.1%, to end at 4,436.74, with the Nasdaq Composite 
COMP,
-0.49%

moving the other way, closing down 72.09 points, or 0.5%, to 14,788.09.

What’s driving markets?

Stocks edged higher Wednesday after the Labor Department reported the July consumer price index s rose 5.4% in July from a year earlier, as price measures of food, energy, shelter and new vehicles rose, while costs of used cars, airfare and auto insurance retreated. The reading was about in line with data on June and slightly lower than some predictions for 5.5%.

The government said CPI increased 0.5% month over month on a seasonally adjusted basis also matched expectations, while month-over-month CPI, excluding volatile food and energy prices, rose by 0.3%, below expectations of a 0.4% increase, according to average estimates of economists polled by Dow Jones.

 The 12-month core rate decelerated to 4.3% from 4.5%, which was a 29-year high.

Key members of the rate-setting Federal Open Market Committee, including Chairman Jerome Powell, have said that they see inflation’s rise amid the COVID pandemic as a short-term phenomenon and some may take the most recent report on inflation as affirming that view.

That said, a number of analysts said that the market is also is focused on the health of the jobs market and wages as the recovery in the jobs market is a key mandate for the Fed.

“Ultimately, I would not see this as a narrative-changer for the Fed and the timing of its tapering,” wrote Neil Wilson, analyst at Markets.com in a report following the inflation reading.

“Of course there is ever-present problem for the Fed in trying to balance employment with inflation – real wages, which are declining,” Wilson wrote.

The inflation report comes a day after the Dow and S&P 500 each logged record closes on Tuesday, as investors looked past worries surrounding economic growth and the fast-spreading delta variant of coronavirus. They instead cheered news that the Senate passed a $1 trillion infrastructure bill, sending it to the House of Representatives for its approval.

Read: Stocks and sectors that stand to benefit from $1 trillion infrastructure bill

The yield on the 10-year government bond
TMUBMUSD10Y,
1.347%

was up 1 basis points to 1.35% early Wednesday.

Which companies are in focus?

Shares of Coinbase Global Inc.
COIN,
-3.85%

rose 4% in premarket trading. In its first report as a public company, the cryptocurrency platform reported sales and profit that beat forecasts, though also a tepid third-quarter outlook.

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