U.S. stock futures dipped Friday morning as markets braced for the latest update on the Federal Reserve’s preferred inflation gauge. This critical data comes amid ongoing political and economic uncertainties, including the potential for a government shutdown.
Futures Market Overview
- Dow Jones Industrial Average futures: Fell 88 points (-0.2%)
- S&P 500 futures: Declined 0.3%
- Nasdaq 100 futures: Dropped 0.6%
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Futures slid further after a Trump-backed House Republican proposal to temporarily fund the government failed on Thursday night. With no agreement in place, a partial government shutdown could begin Friday night, adding to market volatility.
Thursday Recap: Mixed Signals in the Markets
On Thursday, the Dow Jones Industrial Average broke a 10-day losing streak — its longest since 1974 — with a modest 15-point gain. In contrast:
- S&P 500: Closed slightly lower
- Nasdaq Composite: Ended the day with minor losses
This tepid performance came as the 10-year Treasury yield surged for a second consecutive day, exerting pressure on stocks.
Key Focus: November’s Inflation Data
Traders are keenly awaiting November’s personal consumption expenditures (PCE) price index, a vital measure of inflation watched closely by the Federal Reserve.
- Predictions:
- Monthly PCE: Expected to rise 0.2%
- Annual PCE: Anticipated at 2.5%
- Core Inflation (excluding food and energy): Expected to increase 0.2% month-over-month and 2.9% annually
This report could carry extra weight after Federal Reserve Chair Jerome Powell suggested earlier this week that inflation remains above the Fed’s 2% target.
Mike Dickson, head of research at Horizon Investments, noted:
“The market reaction could be more pronounced this time, especially after the Fed heightened expectations around inflation data.”
Fed’s Recent Moves Add to Market Jitters
The Federal Reserve recently cut interest rates by 0.25%, signaling it might only lower rates twice in 2025 — fewer cuts than previously forecasted. This announcement caused a sharp selloff on Wednesday, with all major indexes posting significant losses.
Weekly Market Performance:
- S&P 500: Down over 3%
- Dow Jones: Dropped more than 3%
- Nasdaq: Declined over 2%
Additional Economic Reports to Watch
Besides the PCE data, investors are also awaiting the University of Michigan’s consumer sentiment index, set to release Friday. This metric could offer further insights into consumer confidence amid inflation concerns and political uncertainty.
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What’s Next for the Markets?
With the looming government shutdown and the inflation report’s potential impact on interest rate expectations, markets are likely to remain volatile. Keep an eye on key data releases and Treasury yields as they continue to drive investor sentiment.
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Bookmark this page for real-time updates on stock futures, market trends, and economic data. Share your thoughts on the market in the comments below — how do you think the inflation data will influence the Fed’s next move?
