(Reuters) – U.S. stock index futures rose on Friday as investors focused on a key inflation report that could affect expectations about the size of the Federal Reserve’s rate cuts this year.
Global markets are nearing the end of a tumultuous month for riskier assets after signs of a sudden moderation in the labor market in early August fueled fears of a faster-than-expected slowdown in the world’s largest economy. The impact of the Japanese yen carry trade exacerbated the rout.
Since then, risk appetite has improved. The Dow Jones is at a record high and is on track for monthly gains. Later data, including Thursday’s upward revision to economic growth, reassured nervous investors.
The focus now shifts to the July personal consumption expenditures figures, the Fed’s favorite gauge of inflation, due out at 8:30 a.m. ET — the last PCE report before the central bank’s much-anticipated September meeting.
Economists polled by Reuters forecast a slight increase to 2.6% year-on-year, from 2.5% in the previous month.
After Chairman Jerome Powell’s support for an imminent policy adjustment last week, optimism around a September rate cut remains strong. The probability of a 25 basis point cut is 65.5%, while the probability of a 50 basis point cut is 34.5%, according to the CME Group’s FedWatch Tool.
At 5:47 a.m. ET, the Dow E-minis were up 65 points, or 0.16%, the S&P 500 E-minis were up 21.25 points, or 0.38%, and the Nasdaq 100 E-minis were up 126.5 points, or 0.65%.
The tech-focused Nasdaq and S&P 500 closed lower in the previous session after Nvidia failed to meet investors’ lofty expectations despite upbeat results and a broadly in-line forecast. The AI ​​chip bellwether rose 1.7% in premarket trading after a 6.4% decline in the previous session.
The benchmark S&P 500 is near a record high, poised to rise 1.2% monthly, while the Nasdaq fell 0.47% in August.
Rate-sensitive megacaps such as Alphabet and Microsoft rose 0.6% and 0.8% respectively, while Tesla rose more than 1.4%, supported by a drop in US Treasury yields.
Marvell Technology, among other things, forecast that third-quarter results would beat Wall Street expectations, sending the chipmaker’s shares up 9.2%.
Dell Technologies rose 6% after it raised its annual revenue and profit forecasts, boosted by demand for its AI-optimized servers.
Lululemon Athletica rose 4.4% after the company posted higher second-quarter profit, while Ulta Beauty fell 6.2% after it cut its full-year earnings forecast due to weaker demand.
Investors will also analyze the University of Michigan’s final reading on August consumer confidence later in the day.
Trading volumes are expected to decline ahead of the long weekend due to the Labor Day holiday.
(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)
