The Day Ahead: Markets Brace for Inflation Data and Sentiment Signals Today

Market Overview: Tariff Uncertainty Tempers Optimism into Month-End

U.S. equity futures edged lower early Friday, with the S&P 500, Nasdaq-100, and Dow Jones all trading modestly in the red as investors digest ongoing trade developments and brace for fresh inflation data.

Back-and-forth news around U.S. tariffs continues to weigh on sentiment. Thursday’s session saw indexes close well off intraday highs following the Court of International Trade’s reversal on halting tariffs—creating a climate of uncertainty heading into the weekend.

Despite the volatility, major indexes are closing out May with strength. The S&P 500 is on track for a monthly gain of over 6%, while the Nasdaq has surged more than 10%. The Dow is up roughly 4%. Week-to-date, the S&P is up 2%, Nasdaq 2.3%, and Dow 1.4%.

Premarket earnings and inflation data will likely dictate Friday’s tone.

Key Economic Releases: PCE, Income, and Sentiment in Focus

A packed data slate hits at 12:30 GMT, headlined by the Fed’s preferred inflation gauge:

• Core PCE Price Index (MoM): Forecast 0.1% (prior 0.0%)

• Goods Trade Balance: Forecast -$142.8B (prior -$163.2B)

• Personal Income (MoM): Forecast 0.3% (prior 0.5%)

Personal Spending (MoM): Forecast 0.2% (prior 0.7%)

Prelim Wholesale Inventories (MoM): Forecast 0.4% (prior 0.5%)

At 14:00 GMT, more sentiment data follows:

• University of Michigan Consumer Sentiment (Revised): Forecast 51.1 (prior 50.8)

• UoM Inflation Expectations (Revised): Prior 7.3%; no forecast available

Market attention will be on any surprises in core inflation or consumption trends. Deviations could impact Fed expectations ahead of June’s FOMC.

Notable Earnings: Retailers Split as Gap Falls, Ulta Pops

Before the bell, Shoe Carnival (SCVL) reports with EPS expected at $0.30. The stock will be watched for guidance, as retail remains under pressure from shifting consumer spending trends.

Gap (GPS) fell more than 17% premarket after a weak Q2 outlook, while Ulta Beauty (ULTA) rose 7% on strong Q1 results. Dell Technologies (DELL) is modestly higher post-earnings.

Central Bank Activity: Bostic and Goolsbee Take the Mic

Atlanta Fed President Raphael Bostic speaks at 16:20 GMT, followed by Chicago Fed President Austan Goolsbee at 23:30 GMT. Markets will monitor for commentary on inflation trends and the potential impact of tariffs on the Fed’s policy path. Any shift in tone could alter rate expectations heading into June.

Technical Outlook: Indices Coiled Near Key Resistance Zones

The S&P 500 is consolidating near 5,915.50 just above the 50-day SMA at 5894.58. Key resistance sits at 6,008.00, with support at 5,756. A breakout above 6,008.00 would clear the way toward 6,236.50.

The Nasdaq-100 is holding above 50-day SMA at 20,803.76, just off recent highs at 21,858.75 A push through that level targets 22,656, while support rests near 20,727.

The Dow Jones remains capped by 200-day SMA at 43,109 resistance. Short-term support lies near 41,240, aligning with the rising 50-day SMA.

Outlook: Inflation Data and Fed Commentary to Drive Direction

Friday’s session will be driven by inflation data, consumer sentiment and central bank rhetoric. Tariff-related uncertainty adds a layer of headline risk. Traders should watch for reactions to PCE data and consumer inflation expectations to gauge directional conviction into month-end.

More Information in our Economic Calendar.