(Reuters) – Nasdaq and S&P 500 futures rose on Friday on hopes for a moderation in inflation in a report closely watched by the Federal Reserve, while shares of Trump Media & Technology Group rose after a weak performance from Joe Biden in a presidential debate.
The personal consumption expenditures (PCE) price index is expected to remain flat in May after rising 0.3% the previous month, with the core figure rising 0.1% after rising 0.2% the month before, according to data from the Commerce Department.
Deutsche Bank analysts expect the annualized PCE to reach a three-year low, which while promising news for the Fed, would not be enough to reassure the central bank after the unexpected spike in inflation in the first quarter . .
Even as the Fed signals that it will cut rates only once this year in December, market participants are still expecting two cuts starting in September, hoping for a continued downward trend in price pressures and because the economy is still sensitive to multi-decade high interest rates.
According to data from LSEG FedWatch, the probability of a 25 basis point rate cut in September is 60%.
Megacaps including Microsoft, Nvidia, Alphabet and Amazon.com rose slightly in premarket trading.
At 5:33 a.m. ET, the Dow e-minis were up 38 points, or 0.1%, the S&P 500 e-minis were up 18.75 points, or 0.34%, and the Nasdaq 100 e-minis were up 76 points, or 0.38%.
Both the S&P 500 and Nasdaq indexes rose in a week marked by a short-lived decline in AI-related stocks, Amazon.com reaching a market value of $2 trillion for the first time, quarterly profits from companies like FedEx and Micron Technology and a mixed picture of the economic figures.
Among the top gainers, Trump Media & Technology Group and other stocks linked to former President Donald Trump, such as Phunware and Rumble, rose between 1% and 8%.
On Thursday, President Joe Biden delivered a shaky, halting performance as rival Trump attacked him with a series of often false attacks during their debate ahead of the November election.
“As the presidential debate clearly showed, the prospect of a Trump presidency is creating great excitement in financial markets,” said Nigel Green, CEO of deVere Group.
“Wall Street’s realization that policies likely to be implemented under the Trump administration could be more favorable overall.”
Investors also braced for the final reclassification of the Russell benchmark indexes during the day. The intense rally in AI-related stocks is expected to have a huge impact on its final shape.
Nike, among other things, fell 14.2% after forecasting a surprise decline in fiscal 2025 revenue. Rivals Roger Federer-backed On and Under Armor also fell more than 2% each.
(Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
