Nasdaq 100 and S&P500: Bullish Forecast as CPI Softens, Eyes on Earnings and Fed Outlook

Dow Futures Climb as Soft CPI Strengthens Case for Fed Rate Cut

U.S. stock futures rose sharply Friday morning after a lighter-than-expected inflation report bolstered hopes for a Federal Reserve rate cut before year-end. Dow futures gained 232 points, or 0.5%, while S&P 500 and Nasdaq 100 futures rose 0.7% and 0.9%, respectively.

Investors welcomed September’s Consumer Price Index (CPI) reading, which came in at 3% year-over-year, slightly below the 3.1% forecast. Core CPI, which excludes food and energy, matched the headline figure at 3%.

Though marginally higher than the previous month’s 2.9%, the report reinforced the view that inflation is stabilizing. With federal economic data limited due to the ongoing government shutdown, the CPI’s lighter reading gained even more weight in influencing monetary policy expectations.

Is the Fed Now More Likely to Ease Policy?

The cooler CPI data increased the probability that the Fed could initiate a rate cut in one of its two remaining policy meetings this year. Traders are increasingly pricing in a shift from the central bank, especially with inflation now consistently tracking closer to the Fed’s 2% target. As of Friday morning, interest rate futures reflected a heightened chance of easing in December.

Earnings Boost Sentiment as Intel and P&G Beat Expectations

Earnings optimism added to the bullish tone. Intel jumped 3.36% after posting third-quarter revenue that exceeded analyst estimates, driven by demand in its data center and AI-focused units.

Procter & Gamble rose 3% after delivering stronger-than-expected revenue and profit, with growth in its beauty and healthcare segments.

Target also made headlines, edging higher in premarket trading following a decision to cut 8% of its corporate workforce—its most significant layoff in a decade.

Tech and Crypto Stocks Extend Rally

Thursday’s rally in tech continued, led by AI-focused firms. Nvidia and Oracle helped lift the Nasdaq by 0.9% in the previous session, and that momentum carried into Friday.

Meanwhile, digital asset stocks gained ground after JPMorgan upgraded Coinbase to overweight, citing strength in its subscription and DeFi segments. Shares of Coinbase rose 3%, while other crypto-linked firms such as Riot Platforms, Cleanspark, and Galaxy Digital also moved higher. Bitcoin traded above a critical support level, rising nearly 1% premarket.

Outlook: Traders Eye Fed Clues as Earnings Drive Momentum

With CPI coming in lighter than expected and third-quarter earnings providing early upside surprises, short-term sentiment leans bullish. Traders will look for further confirmation in upcoming corporate results and Fed commentary. Next week’s key economic indicators and any shifts in Fed language will be crucial in determining whether the current rally can sustain.

More Information in our Economic Calendar.