Wall Street quiet ahead of inflation data, while Kellanova jumps on Mars acquisition news

Wall Street quietly shifted between small gains and losses early Wednesday as markets wait for more inflation data that could influence the Federal Reserve’s next interest rate decision.

Futures for the Dow, S&P 500 and the Nasdaq were all effectively flat before the opening bell.

The government is expected to report later Wednesday morning that inflation at the consumer level cooled further last month. On Tuesday, it reported that wholesale price increases in the U.S. eased in July, suggesting that inflation pressures are further cooling. Markets followed by rallying to one of their best days of the year.

Inflation in the U.S., which has been a worry for years, finally appears to be inching close enough toward the Federal Reserve’s 2% target. That has most economists and investors are predicting a September rate cut.

For months, cooling inflation has provided gradual relief to America’s consumers, who were stung by the price spikes that erupted three years ago, particularly for food, gas, rent and other necessities.

On Thursday, the government will release its latest data on retail sales, which are expected to show that consumers increased their spending modestly in July. As long as shoppers are willing to spend, businesses are likely to hold onto their workers and may even add staff.

However, a cautious mood remains in global markets over uncertainty about the U.S. economy, even as it continues to grow. Many economists don’t expect a recession, but a sharp slowdown in U.S. hiring last month raised questions about its strength.

In premarket trading Wednesday, Kellanova shares jumped 7.8% on news that Mars is buying the food company in a deal worth nearly $30 billion, giving it access to a huge portfolio of consumer brands from Cheez-Its to Pop-Tarts.

Mars Inc., whose brands include M&M’s, Snickers and Skittles, said it will pay $83.50 per share in cash. The company put the total value of the transaction at $35.9 billion. Kellanova was created when the Kellogg Co. split into three companies in the summer of 2022.

Shares of Southwest Airlines rose 1.4% early Wednesday after Elliott Investment Management said it is launching a proxy fight with the airline and plans to nominate 10 candidates to its board.

According to a regulatory filing Tuesday, Elliott has accumulated roughly an 8% stake in Southwest. The airline’s shares are down 12% this year as its performance has lagged behind competitors.

Elsewhere, in Europe at midday France’s CAC 40, Germany’s DAX and Britain’s FTSE 100 all rose 0.3%.

Japan’s benchmark Nikkei 225 rose 0.6% to finish at 36,442.43 following a day of ups and downs. Australia’s S&P/ASX 200 gained 0.3% to 7,850.70. South Korea’s Kospi added nearly 0.9% to 2,644.50. Hong Kong’s Hang Seng lost about 0.4% to 17,113.36, while the Shanghai Composite shed 0.6% to 2,850.656.

Japan’s governing Liberal Democratic Party controls a majority in the lower house of parliament, which picks the nation’s leader. Prime Minister Fumio Kishida’s public support ratings have sagged over a scandal involving shady political fund raising as well as other issues.

“We must show the Liberal Democratic Party will change. This will be the first step that will demonstrate that clearly,” Kishida said in announcing his decision.

Speculation is rife the party will turn to a younger politician as the next leader, with Shinjiro Koizumi, the son of former Prime Minister Junichiro Koizumi, among those being discussed. The younger Koizumi is still in his 40s, marking a departure from the elderly prime ministers of the past.

Next week brings a slew of economic data about Japan, including machinery orders, trade statistics, tallies of travelers from abroad, unemployment and consumer prices. Analysts think the Japanese economy basically remains on solid ground, thanks to the strong performance of some Japanese companies.

In energy trading, benchmark U.S. crude turned 28 cents lower to $78.07 a barrel. Brent crude, the international standard, lost 17 cents to $80.52 a barrel.

In currency trading, the U.S. dollar rose modestly to 146.89 yen from 146.84 yen. The euro cost $1.1025, up from $1.0995.

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