US stock futures pointed to another rough day on Wall Street Friday after the House of Representatives voted against a Trump-backed spending bill, further increasing the odds of a US government shutdown this weekend.
Investors also digested key inflation data that showed a deceleration in price increases during the month of November after the Federal Reserve lowered the number of cuts it expects next year.
Markets improved throughout the morning but futures tied to the S&P 500 (ES=F) still dropped around 0.5%, while those on the tech-heavy Nasdaq (NQ=F) plunged 0.8%. Dow Jones Industrial Average futures (YM=F) also fell around 0.2%.
A Fed-induced sell-off earlier in the week left the major averages reeling. And although stocks mostly stabilized on Thursday, the threat of a government shutdown, coupled with more Trump tariff threats on Europe, pressured global markets across the board.
“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas,” Trump said in a post on Truth Social. “Otherwise, it is TARIFFS all the way!!!”
Global chip stocks sold off premarket, with Europe’s ASML (ASML) dropping nearly 2% early Friday while Taiwan’s TSMC (TSMC34.SA) fell about 3%. US-based names such as Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) also came under pressure.
And in individual names, Novo Nordisk (NVO) plunged about 20% — the most in over two decades — after its obesity drug trial disappointed investors. Tesla (TSLA) shares dropped 6% after recalling about 700,000 US vehicles over a tire pressure monitoring system defect.
Meanwhile, investors received another piece of the inflation puzzle with the release of the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index.
The latest reading showed price increases fell month over month in November but still remained sticky as the central bank fights to bring inflation back down to its 2% target.
In November, the core Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely tracked by the Fed, rose 0.1% from the prior month, a deceleration from October’s 0.3% monthly gain in prices. The monthly increase came in slightly lower compared to economist expectations of a 0.2% increase.
Over the prior year, core prices rose 2.8%, matching the increase seen in October and also lower than Wall Street’s expectations of a 2.9% rise. On a yearly basis, overall PCE increased 2.4%, a pickup from the 2.3% seen in October. Economists polled by Bloomberg had anticipated a yearly increase of 2.5%.
LIVE3 updates
15 mins ago
Fed’s preferred inflation gauge: Price increases fall in November but still sticky
The latest reading of the Federal Reserve’s preferred inflation gauge showed price increases fell month over month in November but still remained sticky as the central bank fights to bring inflation back down to its 2% target.
In November, the core Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely tracked by the Fed, rose 0.1% from the prior month, a deceleration from October’s 0.3% monthly gain in prices. The monthly increase came in slightly lower compared to economist expectations of a 0.2% increase.
Over the prior year, core prices rose 2.8%, matching the increase seen in October and also lower than Wall Street’s expectations of a 2.9% rise. On a yearly basis, overall PCE increased 2.4%, a pickup from the 2.3% seen in October. Economists polled by Bloomberg had anticipated a yearly increase of 2.5%.
51 mins ago
Here comes another inflation report…
Investors this morning will closely be monitoring a key inflation report set to shape future monetary policy.
The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, which strips out volatile food and energy costs, is expected to have risen 0.2% month over month in November after prices rose 0.3% in October, according to Bloomberg data.
Over the prior year, Wall Street expects core prices to rise 2.9%, ahead of the 2.8% gain seen in October.
Overall PCE is expected to increase 2.5% year over year, an acceleration from October’s 2.3% annual increase.
The report, which will be released at 8:30 a.m. ET, comes after the central bank slashed interest rates by 25 basis points at its last policy meeting of the year on Wednesday. Officials also signaled less easing to come in 2025 with inflation expected to remain elevated over the longterm.
Earlier this month, the core Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, saw prices in November climb 3.3% over last year for the fourth consecutive month.
Meanwhile, the core Producer Price Index (PPI), which tracks the price changes companies see, revealed prices increased by 3.4% annually in November. That’s up from a 3.1% jump in October and also ahead of economist expectations of a 3.2% increase.
In a press conference following Wednesday’s interest rate decision, Federal Reserve Chair Jerome Powell indicated that the last mile of the Fed’s fight to curb inflation has been more challenging than central bank leaders initially projected.
“We’ve had a year-end projection for inflation, and it’s kind of fallen apart as we approach the end of the year,” Powell said. “I can tell you that might be the single biggest factor — inflation has once again underperformed relative to expectations.”
Today at 12:35 PM UTC
Good morning. Here’s what’s happening today.
Economic data: PCE inflation (November), Personal income (November), Personal spending (November), University of Michigan consumer sentiment index (December, final), Kansas City Fed services activity (December)
