Futures slip as investors brace for inflation numbers

(Reuters) – U.S. stock index futures fell on Friday ahead of the release of a key inflation report that will test investor optimism about the scale and pace of interest rate cuts by the Federal Reserve this year.

Wall Street took a breather this week after a recent rally, with the benchmark S&P 500 and the tech-heavy Nasdaq on track for their first weekly losses in six. A rise in Treasury yields put pressure on riskier assets, following a weak debt auction and prolonged concerns about persistent inflation.

Policymakers have also shown no urgency to ease borrowing costs, while continuing to emphasize that inflation would fall this year even if the job market remains strong.

However, Thursday’s revision to first-quarter economic growth due to a slowdown in consumption eased some fears, as bond yields fell and expectations for a September rate cut rose slightly above 50%. . Odds remained below these levels throughout the week, according to the CME FedWatch tool.

All eyes will now be on April’s core personal consumption expenditure data, the central bank’s preferred inflation gauge, due at 8:30 a.m. ET. The index is expected to remain unchanged from the previous month, at 2.8%, on an annual basis.

“Where the release is effective will determine whether we enter a new chapter in the Fed’s disinflation story or whether it remains stuck in the rubble of stubborn inflation,” said Chris Turner, global head of inflation. markets at ING, in a note.

Comments from Atlanta Chairman Raphael Bostic, a voting member of the Federal Open Market Committee, will also be available later today.

Technology stocks including Microsoft, Nvidia and ServiceNow were little changed in pre-market trading after the sector recorded its worst day in more than a month in the previous session, following gloomy forecasts from Salesforce for the second trimester. Shares of the company rose 0.4%.

As of 5:52 a.m. ET, the Dow e-minis were down 29 points, or 0.08%, the S&P 500 e-minis were down 10.5 points, or 0.20%, and the e-minis were down 10.5 points, or 0.20%. -minis of the Nasdaq 100 were down 62.25 points, or 0.34%.

Among the big players, Dell forecast current-quarter profit below market estimates and signaled that higher costs to build servers capable of handling heavy AI workloads would reduce annual margins, pushing down its shares by more than 14%.

Zscaler jumped 17% after the security solutions provider forecast fourth-quarter results that beat estimates, while Marvell Technology fell 4.6% after the chipmaker missed expectations. Street on first-quarter revenue, hurt by weak customer spending in its wireless carrier and enterprise markets.

Gap jumped 23% after the clothing maker raised its annual sales forecast and its first-quarter results beat market expectations, boosted by the strength of its Old Navy and Gap brands as Americans shop. grab their trendy jeans and limited edition clothing.

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(Reporting by Johann M Cherian and…