Don’t fight the Fed,’ Goldman says. These stocks can benefit from higher inflation.

Don’t fight the Fed,’ Goldman says. These stocks can benefit from higher inflation.

U.S. stocks look set to start Monday on the back foot ahead of key inflation data and earnings reports later in the week.

Fears over rising COVID-19 cases and vaccination problems, after a Chinese government official said the effectiveness of its vaccines was low, has put equity markets under pressure.

However, the partial reopening of the U.K. and upbeat comments from Federal Reserve Chair Jerome Powell provided some positivity. Investors will also be awaiting consumer price data on Tuesday and earnings from major banks JPMorgan Chase, Goldman Sachs and Wells Fargo later this week.

After a delay on Friday, the U.S. Labor Department said the producer-price index, a key measure of inflation, rose 1% in March “” the biggest annual increase since 2011.

In our call of the day, Goldman Sachs strategists said higher inflation was on the cards in the coming months, which could boost companies with high pricing power.   

"'Don't fight the Fed' is a quip investors have learned to ignore at their peril. What the central bank wants is usually what it gets, sooner or later,“ the strategists said, noting that the Fed's intervention a year ago sparked the 80% rally that has lifted the S&P 500