U.S. stock futures struggled to find their bearings on Friday morning as investors awaited an update on inflation, which is expected near a 40-year high amid high oil prices. gas, food and various other goods and services.
Contracts on the S&P 500 and Dow Jones were each down about 0.2% in premarket trading. Nasdaq futures traded slightly higher. Treasury yields rose along the short end of the curve, while the benchmark 10-year yield stabilized around 3.03%. U.S. crude oil prices rose 0.7% to trade above $122 a barrel, holding near the highest level since March.
For market participants, the 8:30 a.m. release from the Bureau of Labor Statistics of Consumer Price Index (CPI) will be a key print, offering a fresh look at the extent to which price increases have persisted across the broader US economy. Consensus economists are looking for inflation to rise to 8.3% year-on-year in May, according to Bloomberg, matching the April clip and just a hair below March’s high of 8.5% on over 40 years.
The CPI is also expected to accelerate to a 0.7% month-on-month clip in May from April’s 0.3% rise, following a spike in gasoline prices. as the summer travel season approaches. Core inflation, which excludes volatile food and energy prices, is expected to decline only slightly to an annual gain of 5.9% from April’s 6.2%.
Inflation has remained a dominant issue for investors, policymakers and the American public this year. Rising prices have threatened to weigh on consumer spending – the main driver of US economic activity – as goods and services become increasingly unaffordable. And inflation has already shown signs of triggering spending rotation on some discretionary goods to other buying areas.
And for investors, inflation has also become a key determinant of the way forward for the Federal Reserve’s monetary policies. As the Fed aims to help bring down rapidly rising prices, the central bank is widely expected to raise interest rates another half point at next week’s policy meeting, further raising the cost of borrowing and doing business for businesses.
Amid these worries about the impact of inflation on the economy and the Fed’s next moves, stocks continued to trade choppy. Each of the three major averages was on track to post a straight week of losses, based on Thursday’s closing prices. The S&P 500 headed for a weekly decline of around 2%.
“At the end of the day, markets are facing a lot of uncertainty right now. And it’s not just this inflation story,” said Jack Manley, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live. “We still have some uncertainty, some lack of clarity about what the Fed is going to do. The war in Europe continues to rage. And we know new developments are happening on that front every few days.”
“There’s a lot to digest right now. And without any kind of real clarity on these things, it’s hard for markets to move significantly up or down,” he added. “That’s all the markets really want at the end of the day, is news. And no news is bad news.”
7:14 a.m. ET: Equity futures mixed ahead of inflation data
Here are the top moves in the markets as of 7:14 a.m. ET:
S&P 500 Futures Contracts (ES=F): -6.25 points (-0.16%) at 4,010.00
Dow futures (JM=F): -85 points (-0.26%) to 32,178.00
Nasdaq futures contracts (NQ=F): +6.25 points (+0.05%) to 12,281.25
Raw (CL=F): +$0.94 (+0.77%) at $122.45 per barrel
Gold (CG=F): -$8.20 (-0.44%) at $1,844.60 per ounce
10-year cash flow (^TNX): -0.7 bps for a yield of 3.035%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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