As the market braces for Friday's opening bell, US equity futures have nudged higher, signaling cautious optimism among traders as they analyze the latest inflation data and its potential implications for the Federal Reserve's monetary policy decisions. In premarket trading, both the S&P 500 and the Dow Jones Industrial Average each rose by 0.2%, while the Nasdaq gained a modest 0.1%.
In contrast, Asian exchanges displayed a mixed performance trending lower, whereas European markets characterized a positive inertia tracking in the green. This week, critical government data has shown that consumer inflation in the United States increased as anticipated for August on a sequential basis.
Notably, the annual inflation rate recorded the smallest increase since February 2021. On Thursday, the Bureau of Labor Statistics reported that producer prices exceeded expectations from the previous month, highlighting a rebound in wholesale service costs—critical for gauging overall economic health. The Federal Reserve’s monetary policy-setting committee is scheduled to meet on September 17, with a decision regarding interest rates expected the following day.
Current anticipations deduced from the CME FedWatch tool indicate a roughly 55% likelihood that the central bank will opt to reduce its benchmark lending rate by 25 basis points next week, while the remaining probabilities favor a more aggressive decrease of 50 basis points, suggesting a potential pivot in monetary policy to stimulate growth. Looking at Friday's economic calendar, investors should note the release of the import and export prices report for August at 8:30 am ET, followed by the preliminary University of Michigan consumer sentiment report for September at 10 am.
The weekly Baker Hughes domestic oil-and-gas rig count is also anticipated at 1 pm, providing deeper insights into domestic energy production. In premarket activities, the shares of Adobe ($ADBE) reflected a significant downturn, plummeting 8% after the software maker issued a disappointing fiscal fourth-quarter sales outlook, stirring concerns amongst investors regarding future growth.
Boeing’s ($BA) stock also faced headwinds, declining nearly 4% as employees of the aerospace giant initiated a strike following their rejection of a tentative labor agreement with the International Association of Machinists and Aerospace Workers union, raising questions about production timelines and operational efficiencies. Conversely, the home furnishing retailer RH ($RH) witnessed a remarkable surge, soaring 20% following its announcement of better-than-expected fiscal second-quarter results, showcasing resilience within the retail sector despite broader economic uncertainties. Additionally, overshadowing equity movements, the cryptocurrency market saw Bitcoin dipping slightly by less than 0.1% to a trading price of $58,278.
In commodity markets, West Texas Intermediate crude oil experienced a gain of 1.2%, reaching $69.76 per barrel, while yields on 10-year Treasuries retracted by 3.1 basis points to settle at 3.65%. Gold also moved up, increasing by 0.6% to a price of $2,595 an ounce, reflecting a flight to safety among investors amidst market volatilities..