Dow Set to Open Up After Three-Day Slump
U.S. stock futures were mostly higher early on Friday. The market focus will be firmly on the release of inflation data and what it might mean for interest rates in future.
Dow Jones Industrial Average futures were up 74 points, or 0.2%. S&P 500 futures were rising less than 0.1% while Nasdaq 100 futures were down 0.1%. All three main indexes fell Thursday for a third consecutive day–the first time that’s happened since March 28.
The Bureau of Economic Analysis is due to release the August reading of the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, at 8:30 a.m. ET. The data are expected to show a slight pickup in price growth in August but that might not change the market’s view on likely interest-rate cuts from the Fed.
“It would take structural factors—like a persistently tight labor market, continued fiscal expansion, or an overly accommodative Federal Reserve—to drive a more persistent rise in inflation,” said Josh Hirt, Vanguard senior economist. “None of these are part of our baseline forecast for the next year or two, though they remain risks to monitor.”
Traders currently see a 62% chance of two more quarter-point rate cuts this year, down from 73% a day and 79% last week, according to CME’s Fed Watch tool. The probability of a cut in October is seen as 88%.
The yield on the benchmark 10-year Treasury note stood at 4.190% early on Friday, ticking up from the previous day.
Among individual stocks, Intel and other chip makers are likely to be in the spotlight following a Wall Street Journal report that the Trump administration is considering a policy to ensure chip companies manufacture the same number of semiconductors in the U.S. as their customers import from overseas producers.
Pharma stocks will also be in focus after President Donald Trump announced 100% tariffs on imported pharmaceutical products unless the companies that make them are building plants in the U.S.