U.S. stock futures wavered as investors awaited the last major inflation reading before the Federal Reserve’s meeting next week.
Futures for the S&P 500 were flat Friday. Contracts for the tech-focused Nasdaq-100 gained 0.2% and futures for the Dow Jones Industrial Average ticked down 0.1%. U.S. stock benchmarks posted their biggest declines in more than three weeks on Thursday, leaving indexes on course to end the week with losses.
VIX, VIXmain rose 2.11% and 0.87% separately.
Gold slid 0.43% and touched $1844.8.
Economists surveyed by The Wall Street Journal expect the U.S. consumer-price index reading for May to remain elevated, when figures are released at 8:30 a.m. ET. Rising fuel prices and supply-chain disruptions from Russia’s war against Ukraine as well as lockdowns from China’s zero-Covid strategy have contributed to higher prices.
Heightened inflation is likely to put pressure on the Fed to lift interest rates quickly in an effort to temper rising prices. Fed officials are largely expected to raise the central bank’s key interest rate by half a percentage point next week and replicate that in July.
Treasury Secretary Janet Yellen warned this week that the U.S. is likely facing a prolonged period of elevated inflation. Some investors are worried that financial tightening to curb inflation could also hit growth, boosting concerns about a recession. The World Bank has sharply lowered global growth forecasts and flagged a risk of recession in many countries.
“We’re bracing ourselves for the volatile, sideways markets to continue for a while yet. We think the market will take a bit more convincing that peak core prices are behind us and they will fade meaningfully,” said Edward Smith, co-chief investment officer at U.K. investment firm Rathbone Investment Management.
In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 3.025% from 3.041% Thursday. Meanwhile the yield on the two-year Treasury note, which typically reflects investors’ interest-rate expectations, ticked up to 2.841% from 2.815% Thursday. Yields and prices move inversely.
In premarket trading, shares ofDocuSignfell 25% after the e-signature software developer said that its growth slowed in the first quarter and that it is scaling back its hiring plans. Stitch Fixdropped 16% off hours after the personal-styling service said it is cutting about 330 jobs as it contends with a slowdown in consumer spending and widening losses.
Vail Resorts gained 4.8% ahead of the bell after the ski-resort operator said third-quarter earnings and revenue surged as the impact of the Covid-19 pandemic and related restrictions waned from the same time a year ago. Rent the Runwayjumped 9.9% after it said its revenue doubled from a year ago in the recent quarter.
In energy markets, Brent crude, the international benchmark for oil prices, edged 0.2% higher to $123.35 a barrel. Disruptions in global oil markets caused by the Ukraine war and the subsequent sanctions imposed on Russia are likely to keep oil prices elevated. Oil prices typically drive gasoline costs.
Overseas, the pan-continental Stoxx Europe 600 declined 1.3%, leaving the broad index on course for its fourth-consecutive day of losses. European stocks came under pressure Thursday after the European Central Bank said it would increase its key interest rate from minus 0.5% to zero or higher by September, and probably further after that.
In Asia, most major indexes closed lower. Japan’s Nikkei 225 fell 1.5% and South Korea’s Kospi declined 1.1%. China’s Shanghai Composite bucked the trend, adding 1.4%.