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U.S. equity index futures retreated on Friday as the latest inflation report added to investors’ concerns that a rebound in price pressures could delay the start of Federal Reserve interest-rate cuts.
How stock-index futures are trading
-
S&P 500 futures
ES00,
-0.15%
shed 9 points to 5,037. -
Dow Jones Industrial Average futures
YM00,
-0.30%
fell 133 points, or 0.3%, to 38,858. -
Nasdaq-100 futures
NQ00,
+0.12%
climbed 8 points, or less than 0.1%, to 17,921.
On Thursday, the S&P 500
SPX
rose 0.6% to 5,029.73, just surpassing its record close reached last week. The Dow Jones Industrial Average
DJIA
gained 0.9% to 38,773.12 and the Nasdaq Composite
COMP
climbed 0.3%, to 15,906.17.
What’s driving markets
U.S. stock futures erased early gains following the release of the January PPI, which, like the CPI data released earlier in the week, reflected a larger increase in prices than economists had expected.
Wholesale prices rose in January at the fastest rate in five months, gaining 0.3% while surpassing the 0.1% increase that economists polled by The Wall Street Journal had anticipated. Core wholesale prices, which exclude food, energy and trade margins, rose by an even larger 0.6%.
“Friday’s stronger-than-expected Producer Price Index suggests that inflation is stickier than many investors expected and this data, in addition to Tuesday’s strong Consumer Price Index, suggests that the Federal Reserve has very little reason to cut interest rates anytime soon,” said Clark Bellin, president and chief investment officer at Bellwether Wealth, in emailed commentary.
U.S. stocks fell sharply following the CPI report earlier this week, with the S&P 500 booking its biggest drop in nearly a year.
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PPI wasn’t the only piece of economic data released on Friday. Investors also digested housing starts, which showed the construction of new homes fell 14.8% in January, as home builders scaled back new projects.
Next up, the University of Michigan preliminary consumer sentiment survey for February is due at 10 a.m.
Investors will also hear from some high-ranking Fed officials Friday, including Fed Vice Chair for Supervision, Michael Barr, who is scheduled to speak at 9:10 a.m., followed later by San Francisco President Mary Daly at 12:10 p.m.
Technology stocks continued to march higher, adding to their gains from earlier in the week and helping push the Nasdaq into an early lead on Friday among the major index futures.
Shares of Applied Materials Inc.
AMAT,
surged 13% in premarket trading after the chip-equipment company delivered upbeat results and guidance after Thursday’s close. Among other big sector names, shares of Tesla Inc.
TSLA,
rose 2% in premarket trade, with Nvidia Corp.
NVDA,
up 1.5%. Nvidia is expected to report fourth-quarterly results next week.
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