A Wall St. sign is seen in New York
A Wall St. sign is seen in New York City, U.S., March 13, 2023. Reuters

Wall Street looked set to open higher on Tuesday after consumer prices in the world's largest economy rose in line with expectations, bolstering bets of a smaller interest rate hike by the Federal Reserve at its next meeting.

Data showed that U.S. Consumer Price Index (CPI) rose 0.4% in February versus 0.5% a month ago, while on a yearly basis, it rose 6.0% last month compared with 6.4% the previous month.

Traders held on to bets of a 25-basis-point rate hike at the Fed's March meeting, with odds of a pause in hikes slipping a bit to 15%.

Stocks have been hammered in the past few days following the collapse of SVB Financial and peer Signature Bank and fears of contagion in the banking sector.

Investors are hoping that the threat of a financial crisis will force the U.S Federal Reserve to ease up on monetary tightening.

"In light of the weekend's events, I don't think it could have been a more perfect number. It's showing that inflation is trending the way that the Fed has kind of expected and wanted," said Kim Forrest, chief investment officer, Bokeh Capital Partners, Pittsburgh.

"The Fed's not going to be super aggressive and hurt banks more by raising interest rates."

The yield on two-year Treasury notes, which best reflect interest rate expectations, tumbled below the 4% mark on Monday and is currently at 4.26%.

Regional bank stocks rebounded in premarket trading. First Republic Bank jumped 59%, a day after the mid-cap lender's executive chair, Jim Herbert, told CNBC the bank has been able to meet withdrawal demands with additional funding from JPMorgan Chase & Co.

At 9:02 a.m. ET, Dow e-minis were up 301 points, or 0.95%, S&P 500 e-minis were up 43.25 points, or 1.12%, and Nasdaq 100 e-minis were up 124 points, or 1.04%.

Big U.S. banks, including JPMorgan Chase & Co, Citigroup and Wells Fargo, gained between 1.2% and 3.4% after losing ground in the previous session.

Shares of ride-hailing companies Uber Technologies Inc and Lyft Inc rose 6.4% and 6%, respectively, after a California state court revived a ballot measure allowing app-based services to treat drivers as independent contractors rather than employees.

United Airlines Holdings Inc fell 4.5% after the U.S. carrier on Monday forecast an unexpected loss in the current quarter, citing lower demand.