Nasdaq Index, Dow Jones, S&P 500 News: US Stock Futures Lower Ahead of Inflation Report

U.S. Stock Futures Edging Lower as Investors Eye Key Inflation Data

U.S. stock futures are declining on Friday as investors are evaluating a series of corporate earnings reports ahead of a crucial inflation update. Wall Street is appearing set to conclude a losing week, despite an overall strong month for stocks.

At 12:16 GMT, Dow futures are trading 38217.00, down 14.00 or -0.04%. S&P 500 Index futures are at 5248.75, down 4.25 or -0.08% and Nasdaq futures are trading 18567.00, down 39.50 or -0.21%.

Key Inflation Data Release

The April personal consumption expenditure (PCE) data, a critical inflation measure closely watched by traders, is expected on Friday morning. Economists surveyed by Dow Jones are predicting a 2.7% year-over-year increase for core PCE, a slight decrease from the previous 2.8% gain. This data is pivotal as the Federal Reserve is using PCE as its preferred inflation gauge.

Wall Street’s Weekly Performance

Wall Street is ending the holiday-shortened trading week on a negative note. Both the S&P 500 and Nasdaq Composite are set to break their five-week winning streaks, while the Dow Jones Industrial Average is heading for a second consecutive week of losses. The rise in Treasury yields is dampening investor sentiment, contributing to this week’s downturn.

Monthly Gains Despite Weekly Losses

Despite the week’s losses, stocks are on track to close out a positive month. The major indices are set to record a sixth positive month in seven. The Dow is rising 0.8% this month, while the S&P 500 is increasing by 4%. The tech-heavy Nasdaq Composite is gaining nearly 7%, marking its best month since November.

Concerns Over Market Rally

Investors are expressing concern that the recent stock rally is starting to wane. They are worried that the advance of a few large-cap tech stocks, like Nvidia, is masking weakness in the broader market. The S&P 500 is climbing roughly 10% this year, but the equal-weighted index is up only about 3%.

“When we see option pricing betting that the momentum is going to continue or actually exceed history, that becomes a problem for us,” Jeff deGraff, head of technical research at Renaissance Macro Research, is telling CNBC’s “Closing Bell.” He is citing recent spikes in semiconductor stocks such as Qualcomm and Nvidia.

“They might consolidate over the summer, but this isn’t the place to be putting in fresh money,” deGraff is adding. “So, I think the expectations are pretty filled up here, and we just want to be careful.”

Corporate Earnings Reactions

Traders are digesting the latest company earnings results on Friday. Dell Technologies is tumbling 16% even after its first-quarter results beat expectations. Cloud security stock Zscaler is surging 15%, while developer data platform MongoDB is plunging almost 24%. Apparel retailer Gap is surging more than 22%, while department store chain Nordstrom is sliding more than 2%.

Market Forecast

Given the mixed signals from corporate earnings and the anticipated PCE data, the market is likely to remain cautious in the short term. Traders are expected to monitor inflation trends and large-cap tech performance closely, potentially leading to a consolidation phase over the summer.

Technical Analysis

E-mini S&P 500 Index fuures are edging lower on Friday, rapidly approaching the important 50-day moving average at 5215.76 that could determine the near-term direction of the market. Trader reaction to this intermediate-trend indicator sends the tone on Friday.