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U.S. equity futures rebounded firmly in early Friday trading, but are still on track for their worst week of the year, as investors looked to a key inflation report that could cement expectations for an autumn Federal Reserve rate cut.
Stocks ended lower again on Thursday, with elevated levels of market volatility creating whipsaw moves in all three major indices, following a stronger-than-expected reading for second quarter GDP and the ongoing selloff in megacap tech shares.
Related: GDP report jolts Fed soft-landing hopes
The Philadelphia Semiconductor sector index, a key tech benchmark, fell 1.96% yesterday to take its five-day decline just under 8%, while AI chip stalwart Nvidia (NVDA) extended its slump towards bear market territory with another 1.7% pullback.
Focus in today’s session, however, is likely to switch to the release of the Fed’s preferred inflation gauge, the PCE Price index, prior to the start of trading as investors look for confirmation the the central bank will begin easing in September.
Economists are looking for the headline rate to ease modestly, to an annual rate of 2.5%, with a similar downtick for the core reading for the month of June.
Benchmark 10-year notes yields, which have fallen around 7 basis points this week, were last marked at 4.241% while 2-year notes were trading at 4.429%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.02% higher at 104.377.
Markets are looking for details from today’s inflation data that will provide clarity on the Federal Reserve’s near-term rate path.
Heading into the start of trading on Wall Street, futures contracts tied to the S&P 500, which is now down 1.17% for the month, suggest a solid opening bell gain of around 43 points.
The Dow Jones Industrial Average, meanwhile, is priced for a 250 point gain, while the tech-focused Nasdaq is called 195 points higher.
Related: Former Fed official changes tune on what’s next for interest rates
The market’s key volatility gauge, however, remains firmly elevated near the highest levels in six months, and suggests daily swings of around 59 points for the S&P 500.
Early movers of note include 3M (MMM) , which jumped 5.44% in premarket trading after the industrial group posted stronger-than-expected second quarter earnings and boosted its full year profit forecast.
More Wall Street Analysts:
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In overseas markets, Europe’s Stoxx 600 was marked 0.35% higher in Frankfurt, while France’s CAC-40 jumped 0.86% ahead of the formal opening ceremony for the Olympic Games in Paris.
Overnight in Asia, Japan’s Nikkei 225 ended 0.53% lower amid another broad decline in domestic tech stocks, while the regional MSCI ex-Japan benchmark slipped 0.08% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
