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U.S. equity futures edged lower Friday, while Treasury yields and the dollar held steady, as investors looked to close out a losing week on Wall Street while bracing for key inflation data prior to the start of trading.
Stocks ended lower again last night, pulling the Dow more than 330 points into the red and extend the average’s worst weekly performance in more than a year, as investors closely-tracked movements in the bond market that suggest renewed inflation risks tied to a resilient economy.
First quarter GDP data, however, provided some test to that thesis, as the Commerce Department’s second estimate of first quarter growth slipped to 1.3%, the slowest since 2022, from an original estimate of 1.6%, while inflation pressures muted slightly.
While dated, the BEA’s April reading of core inflation remains the Fed’s preferred gauge of consumer price pressures.
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The Bureau of Economist Analysis will publish its benchmark PCE Price Index for the month of April, the Federal Reserve’s preferred inflation gauge, at 8:30 am Eastern time. Economists are looking for the core reading to hold at 0.3% on the month and 2.8% on the year.
Bond markets will key acutely reactive to the data release, following a week in which benchmark 10-year note yields hit a one-month high, with stocks likely trading in tandem as market volatility gauges test the highest levels since late April.
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Benchmark 10-year note yields were last seen trading at 4.56% heading into the start of the New York session, while 2-year notes held at 4.951% while the dollar index was little changed against a basket of its global peers at 104.686.
On Wall Street, futures tied to the S&P 500, which is sitting on a monthly gain of 3.97%, are priced for a modest 12 point decline while those linked to the Dow Jones Industrial Average suggest a 33 point dip.
The tech-focused Nasdaq, which had its biggest loss of the month yesterday but is still up 6.9% since the end of April, is called 70 points lower.
Stocks on the move in premarket trading include Dell Technologies (DELL) , which tumbled 15.25% to $144 each after the PC and server maker posted a mixed set of first quarter earnings and cautioned that profit margins would suffer from its AI investment plans.
Gap (GPS) shares, meanwhile, surged 23.7% after the clothing retailer boosted its full-year sales forecast following better-than-expected first quarter results that included a rebound in sales for its Old Navy brand.
Costco Wholesale (COST) shares, however, edged 1.75% lower even as the bulk discount retailer topped Wall Street forecasts for its fiscal third quarter earnings and reported overall revenues of $58.52 billion.
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In overseas markets, Europe’s Stoxx 600 slipped 0.05% in Frankfurt as investors trading U.S. stocks heading into the April inflation reading, while Britain’s FTSE 100 bumped 0.29% higher in London.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 0.52% into the close of trading while the Nikkei 225 managed to book a 0.2% gain for the month of May with a Friday advance of 1.14%.
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