After three days in negative territory, the Spanish stock index IBEX 35 opened higher on Wednesday, supported by Wall Street's advances, although caution prevailed as it awaits macroeconomic data that is expected to determine the course of the day.

The US consumer price index (CPI) for March (12:40 GMT) "will be relevant (after last Friday's strong employment) to determine whether the Fed starts cutting rates at the June meeting (current probability 52%) in case it confirms or improves forecasts, or on the contrary delays the start of the cuts until later, if March inflation is stronger than expected for the third consecutive month," said analysts at Renta 4.

According to a Reuters poll, core CPI -- which excludes unprocessed food and energy -- could stand at 3.7% y-o-y, down from 3.8% in the previous month, up 0.3% month-on-month (0.4% in February). In the case of the general CPI, the increases would be 3.4% year-on-year and 0.3% monthly, compared to 3.2% and 0.4%, respectively, in February.

In recent days, markets have drastically reduced bets on rate cuts this year in the face of signs that point to the strength of the economy and prices, so that a higher-than-expected CPI could exacerbate the correction in stock markets.

This scenario has reduced the odds of a June rate cut to 56%, down from levels above 60% last week, according to interest rate futures on LSEG's IRPR tool. Now investors are not even sure whether there will be three 25 basis point cuts this year or just two, after as many as six cuts were forecast in January.

After the inflation data, investors will have more material to adjust their bets on borrowing costs with the release of the minutes of the Fed's latest meeting on Wednesday and the European Central Bank's meeting on Thursday, which is tentatively expected to suggest a cut in June.

On the international political front, the focus was on the Middle East with the exchange of threats between Israel and Iran keeping markets on edge over fears of an extension of Israel's war on Gaza.

At 07:11 GMT on Wednesday, the Spanish selective stock market index Ibex-35 was up 37.00 points, or 0.34%, to 10,853.00 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.60%.

In the banking sector, Santander lost 0.12%, BBVA fell 0.33%, Caixabank advanced 1.17%, Sabadell gained 0.47%, Bankinter traded practically flat, and Unicaja Banco rose 0.51%.

Among the large non-financial stocks, Telefónica gained 0.13%, Inditex barely moved, Iberdrola gained 0.67%, Cellnex gained 0.71%, and the oil company Repsol rose 0.38%.

(Information by Tomás Cobos; edited by Javi West Larrañaga)