(Reuters) – Nasdaq and S&P 500 futures rose on Friday, buoyed by hopes of moderating inflation in a closely watched report from the Federal Reserve, while shares of Trump Media & Technology Group jumped after a weak performance by Joe Biden in a presidential debate.
Data from the Commerce Department is expected to show that the personal consumption expenditures (PCE) price index remained stable in May after rising 0.3% the previous month, with the core figure forecast to rise by 0. 1% after an increase of 0.2% the previous month.
Deutsche Bank analysts expect year-over-year PCE to be at its lowest level in more than three years, which, while promising for the Fed, would not be enough to reassure the central bank after the unexpected rise in inflation seen in the first quarter.
Even though the Fed plans just one interest rate cut this year in December, market participants still expect two cuts starting in September, hoping for a sustained downward trend in pressures on prices and to the extent that the economy remains sensitive to high interest rates for decades.
The chances of a 25 basis point cut in September are 60%, according to LSEG FedWatch data.
Megacaps including Microsoft, Nvidia, Alphabet and Amazon.com rose slightly in premarket trading.
As of 5:33 a.m. ET, the Dow e-minis were up 38 points, or 0.1%, the S&P 500 e-minis were up 18.75 points, or 0.34%, and the e-minis were up 18.75 points, or 0.34%. -minis of the Nasdaq 100 were up 76 points, or 0.38%.
The S&P 500 and Nasdaq indexes were both higher in a week marked by a short-lived rout in AI-related stocks, with Amazon.com hitting a $2 trillion stock market value for the first time, quarterly profits from companies like FedEx and Micron Technology, and a mixed set of economic data.
Among the biggest movers, Trump Media & Technology Group and other stocks linked to former President Donald Trump such as Phunware and Rumble rose between 1% and 8%.
President Joe Biden delivered a shaky, halting performance on Thursday as his rival Trump hit him with a series of often false attacks during their debate ahead of the November election.
“As the presidential debate made clear, the prospect of a Trump presidency is generating considerable excitement in financial markets,” said Nigel Green, CEO of deVere Group.
“Wall Street believes that policies likely to be implemented under a Trump administration could be more beneficial overall.”
Investors were also bracing for the final reconstitution of the Russell benchmark indices later in the day, with the furious rally in AI-related stocks expected to leave an outsized imprint on their final shape.
Nike, among others, fell 14.2% after forecasting a surprise revenue decline for fiscal 2025. Rivals On and Under Armour, backed by Roger Federer, also fell more than 2% each.
(Reporting by Ankika Biswas in Bangalore; Editing by Maju Samuel)
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