Here are the most important news, trends and analysis that investors need to start their trading day:
1. Futures rose after more hot inflation, ahead of Powell testimony
U.S. stock futures rose Wednesday — and the 10-year Treasury yield was around 1.38% — after the government's latest inflation report came in hot. In prepared testimony to a House panel, Federal Reserve Chairman Jerome Powell said the central bank is still a ways off from altering monetary policy. He also said he expects inflation to moderate. He speaks at noon ET Wednesday and goes before a Senate committee Thursday morning.
A day after higher-than-expected June consumer prices, the producer price index for last month soared 7.3% year over year and the core rate excluding food and fuel jumped 5.6%. Month over month, both the headline PPI and the core rate rose 1%. The Dow Jones Industrial Average, S&P 500 and Nasdaq on Tuesday retreated from record closes, breaking two-session winning streaks.
2. More financial firms report earnings
Bank of America shares dropped less than 2% in the premarket after the company on Wednesday morning posted second-quarter revenue below expectations. Excluding a one-time $2 billion tax gain, adjusted earnings of 80 cents per share edged out estimates.
Citigroup posted second-quarter earnings of $2.85 per share. Revenue was $17.47 billion. Both measures beat estimates. Shares gained 1.5% in the premarket. Quarterly results benefited from a $1.1 billion boost from releasing reserves the bank had previously set aside for loan losses.
Wells Fargo on Wednesday morning reported second-quarter earnings and revenue results that topped expectations as it continued to release funds it had set aside during the pandemic to safeguard against widespread loan losses. Shares were flat in premarket trading.
BlackRock, the world's largest asset manager, reported a 28% jump in second-quarter earnings that handily beat estimates. Investors poured more money into the company's funds, boosting its assets under management 30% year over year to nearly $9.5 trillion. Shares fell around 2% in the premarket.
3. Airline stocks rise on promising quarterly results
Delta Air Lines reported second-quarter revenue that topped estimates, saying leisure and business travel bookings rose sharply. The Atlanta-based airline posted a profit of $652 million, snapping a five-quarter streak of losses, thanks to federal coronavirus aid that offset some of its costs. Shares rose nearly 2% in premarket trading.
American Airlines shares rose more than 3% in Wednesday's premarket, the morning after the carrier forecast better revenue and a narrower loss than previously estimated for the second quarter.
4. Hospitalizations rising again as delta variant spreads
The spread of the Covid delta variant across unvaccinated pockets of the U.S. is causing flare-ups in cases and leading to increases in hospitalizations, according to infectious disease specialists. New daily Covid infections are once again on the rise as the highly transmissible delta variant, first detected in India, takes hold as the dominant strain in the U.S. Cases are rising in Missouri, Arkansas, Nevada, Utah and Florida at higher rates than in other states over the past couple of weeks.
5. Senate Democrats reach $3.5 trillion budget deal
President Joe Biden is set to meet with Senate Democrats on Capitol Hill on Wednesday to talk about their budget agreement. The accord announced Tuesday night envisions spending $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into climate-change initiatives, as well as health care and family service programs sought by Biden. It's not clear whether Democrats have all members on board in the spilt Senate. Moderates like Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona might still demand further changes.
— Reuters and The Associated Press contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC's coronavirus coverage.