U.S. equity futures nudged higher in early Wednesday trading, while the dollar eased and Treasury yields steadied, as investors braced for a crucial December inflation report that could define the market's direction over the coming weeks.

Investors are gearing up for December's crucial consumer price index to determine the direction of Fed policy.

U.S. stocks are ticking higher following an encouraging update on inflation. The S&P 500 rose 0.4% in early trading Tuesday. The Dow Jones Industrial Average was up 163 points, and the Nasdaq composite was 0.