.png){kind=logo}
US stock futures moved higher on Friday as investors prepared for the August consumer price index report. Oil prices eased from recent highs, while Treasury yields stayed close to multiyear peaks. Markets remained cautious after Wall Street recorded four straight sessions of losses.
US stock futures gained ground before the opening bell. At 5:31 a.m. ET, Dow E-minis rose 276 points, or 0.53%. S&P 500 E-minis gained 0.54%, while NASDAQ 100 E-minis increased 0.57%. Earlier readings also showed positive movement across the three major indexes.
The gains followed another weak Wall Street session. On Thursday, the Dow Jones Industrial Average fell more than 300 points, or 0.6%. The S&P 500 dropped 0.6%, while the NASDAQ Composite declined 0.7%. All three indexes recorded their fourth straight daily loss.
For the week, the Dow remained on course for a decline of about 2.5%. The S&P 500 and NASDAQ were each heading toward losses of about 1.6%.
Investors now await the August CPI report. Economists expect consumer prices to rise 0.4% from July and 3.4% from a year earlier. Core CPI, which removes food and energy prices, is expected to rise 0.2% monthly and 2.4% annually.
The CPI report comes one day after hotter producer price data added pressure to bond markets. The producer price index increased 0.4% in August and rose 5.4% from a year earlier.
The inflation readings arrive ahead of the Federal Reserve’s Sept. 15-16 meeting. Futures markets showed traders assigning roughly a two-thirds to 70% chance of a 25-basis-point interest-rate increase, although estimates varied during early trading.
Christopher Hodge, chief US economist at Natixis CIB Americas, said an inflation reading near expectations could reduce pressure on the Fed to raise rates.
“A reading in line with consensus would represent the fourth consecutive month of encouraging inflation readings and ease pressure for a hike by the Fed in September,” Hodge said.
However, he added: “If inflation comes in hotter than consensus, we expect a hike at next week’s meeting.”
Investors will also watch preliminary University of Michigan consumer sentiment and inflation expectations later Friday.
Oil prices moved lower on Friday after a sharp rally earlier in the week. Brent crude fell more than 3% at one point but remained above USD 104 a barrel. Earlier trading placed Brent near USD 106 after it closed above USD 107 on Thursday.
West Texas Intermediate crude also declined but remained close to USD 100 a barrel. Energy markets continue to track shipping conditions around the Strait of Hormuz and the wider Middle East conflict.
Shipping activity through the Strait of Hormuz has fallen sharply. Reuters-cited data showed seven vessel transits on Thursday, compared with a 10-day moving average of 15.
Meanwhile, reports said Gulf officials and Iranian authorities were considering talks related to shipping through the strait. Markets also monitored activity involving Iran-backed Houthi forces in Yemen and risks around the Bab el-Mandeb Strait.
Bill Adams, chief US economist at Fifth Third Commercial Bank, said, “The surge in energy prices since the turn of the month creates new upside risk for inflation.”
Treasury yields remained elevated following a major bond-market sell-off. The 10-year US Treasury yield traded near 4.94% on Friday after approaching 5% during Thursday’s session, its highest level since 2023.
The 30-year Treasury yield also reached about 5.3%. Higher government bond yields can reduce demand for stocks because investors can receive stronger returns from lower-risk fixed-income assets.
A Bloomberg Markets Pulse survey found that 30% of 122 respondents believed a 10-year Treasury yield between 5% and 5.25% could contribute to a 10% decline in US stocks from their peak. Another 22% placed that level between 5.25% and 5.5%.
Bond markets have faced pressure from rising energy prices, inflation concerns and tighter monetary policy expectations. The European Central Bank also raised interest rates on Thursday.
Oracle shares jumped about 7% in premarket trading after the company reported stronger quarterly revenue and profit. Its cloud infrastructure sales more than doubled as demand linked to artificial intelligence continued to grow.
Oracle also added more than USD 30 billion in AI cloud contracts during the quarter. Its remaining performance obligations reached USD 664 billion. The company maintained its full-year capital spending forecast of USD 90 billion to USD 95 billion.
Adobe moved in the opposite direction. Shares fell more than 2% after the software company issued a fourth-quarter revenue forecast whose midpoint came below Wall Street expectations.
Adobe reported adjusted earnings of USD 6.13 per share for the third quarter, above the USD 6.07 analyst estimate. Revenue reached USD 6.76 billion, compared with expectations of USD 6.69 billion.
Meanwhile, Nvidia gained in premarket trading, while ACV Auctions surged after Copart agreed to acquire the online vehicle auction company in a deal valued at nearly USD 1.9 billion.
Friday’s market direction will now depend heavily on the CPI reading as investors assess inflation, Treasury yields, oil prices, and expectations for the Federal Reserve’s next move.
Also Read: Stock Market Update: Nifty Opened 0.88% Lower, Sensex Declined 593 Points Amid Rising Oil Prices
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be risky, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.
