What’s driving the markets?

Stocks rallied Tuesday in volatile trade after Fed Chairman Jerome Powell predicted a sharp decline in inflation this year, but also said more interest-rate hikes will be needed.

“The downside risk to Powell’s comments is that while inflationary pressures are easing in the goods economy, the services sector, which has more sticky inflation components, could underpin high inflation for much longer than anticipated,” said Peter Garnry, head of equity strategy at Saxo Bank, in a note to clients.

Investors will get fresh insight from Fed officials on Wednesday, kicking off with an appearance by New York President John Williams at 9:15 a.m. Eastern, followed by Fed Gov. Lisa Cook at 9:30 a.m., Vice Chair Michael Barr and Atlanta President Raphael Bostic at 10 a.m., Minneapolis President Neel Kashkari at 12:30 a.m., then Fed Gov. Christopher Waller at 1:45 p.m.

Ten
TMUBMUSD10Y,
3.659%
and 2-year
TMUBMUSD02Y,
4.458%
bond yields were slipping, while the dollar
DXY,
-0.10%
was falling and oil prices
CL.1,
+1.13%
were higher.

Read: The bond market is flashing a warning that U.S. stocks could be headed lower

Elsewhere, late Tuesday in his State of the Union address late Tuesday, President Joe Biden called for a quadrupling of the tax on corporate stock buybacks, as well as pledging to cut the deficit by $2 trillion.

Read: Why Biden’s 4% buyback tax could boost stock prices and dividends

Uber Technologies Inc.
UBER,
+2.95%
was among the companies reporting ahead of the open, with shares climbing 6% in premarket trading after the ride-hailing company lifted its outlook.

Walt Disney Co.
DIS,
+1.60%,
Wynn Resorts Ltd.
WYNN,
+0.58%,
Robinhood Markets Inc.
HOOD,
-0.47%,
among others, will report after the close.

Companies in focus

• CVS Health Corp.
  CVS,
  +0.86%
  reported forecast beating earnings and revenue, and also said it will acquire Oak Street Health Inc.
  OSH,
  +29.74%
  in a deal valued at $10.6 billion. CVS share rose nearly 2% and Oak Street shares climbed 4% in premarket trading.

• Chipotle Mexican Grill
  CMG,
  +1.33%
  missed expectations on both earnings and same-store sales, and shares were down 4% in premarket trading.

• Shares of Manchester United
  MANU,
  -1.54%
  surged 13% in premarket trading after a report that a Qatari bid was imminent for the U.K. football club.

• Yum Brands Inc.
  YUM,
  +0.22%
  shares dipped 0.7% though the company said Wednesday it had net income of $371 million, or $1.29 a share, for the fourth quarter, up from $330 million, or $1.11 a share, in the year-earlier period. The parent to Taco Bell, Pizza Hut and KFC restaurants said revenue rose 7% to $2.019 billion.

• Capri Holdings Ltd.
  CPRI,
  +0.38%
  stock slid 19% in premarket trade Wednesday, after the parent of Michael Kors, Jimmy Choo and Versace reported lower-than-expected earnings.

• Shares of eBay
  EBAY,
  +0.38%
  edged down Wednesday after the e-commerce marketplace firm said Tuesday that it would cut around 4% of its workforce.