US stocks pulled back from record highs before the bell on Friday as Wall Street readied for an update on consumer inflation that will feed into expectations for interest-rate cuts.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both fell about 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the retreat, down 0.5%.
Markets are bracing for an update on consumer inflation, after signs of a resilient economy helped lift the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) to new all-time highs on Thursday.
Eyes are firmly on the July reading of the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures index, for insight into the pace of rate cuts.
Bets that the Fed will ease at its September meeting have risen since Chair Jerome Powell opened the door at Jackson Hole, with traders now pricing in an 85% chance of a quarter-point cut. On Thursday, Governor Christopher Waller said he “fully expects” more easing to follow in coming months, amid cracks in the labor market.
Economists expect annual “core” PCE — which leaves out volatile food and energy prices — to come in at 2.9% in the data, slated for release at 8:30 a.m. ET. The monthly core reading is seen as holding steady at 0.3%.
The Fed-favored report caps a rocky week for markets gripped by Nvidia (NVDA) earnings and President Trump’s effort to oust its governor Lisa Cook, which took a new turn.
But Wall Street stocks are still on track for small weekly wins, with more solid monthly gains in sight as they hold their ground in record territory. The S&P 500 eyed a 2.6% gain for August after crossing 6,500 for the first time, while the Dow was poised for a rise of about 3.5%. Meanwhile, the Nasdaq Composite (^IXIC) is looking at a 2.8% bump for the month.
LIVE 5 updates
Premarket trending tickers: Dell, Affirm and Alibaba
Here’s a look at some of the top stocks trending in premarket trading:
Dell Technologies (DELL) stock fell 6% in premarket trading as a as a gloomy quarterly profit forecast and weaker-than-expected second-quarter margin rate overshadowed upbeat full-year estimates.
Affirm (AFRM) shares soared 15% before the bell after the company turned a profit in its fourth quarter fiscal earnings and exceeded both earnings and revenue estimates.
Alibaba (BABA) stock rose more than 2% before the bell on Friday after reporting a surge in revenue from China’s AI boom, helping offset a surprise drop in profit tied to a worsening battle with Meituan (3690.HK, MPNGY) and JD.com Inc. (JD) in internet commerce.
Marvell shares slump as data center outlook stokes AI chip worries
Marvell Technology (MRVL) stock tumbled almost 13% in Friday’s premarket trading after the chipmaker’s forecast for data-center-related demand fell short of high expectations.
Wall Street has been betting that cloud giants such as Microsoft (MSFT) and Amazon (AMZN) would clamor for chips customized for AI workloads.
Reuters reports:
Read more here.
Fed’s Waller backs September rate cut, expects more in next 3-6 months
Christopher Waller has signaled he wants the Federal Reserve to start lower interest rates with a quarter-point cut in September, with more easing to follow in the months after.
The Fed governor stepped up his call to reduce short-term borrowing costs as President Trump ramps up pressure on the central bank in a push for rate cuts. Waller is said to be under consideration by Trump to replace Jerome Powell when the Fed chair likely steps down next year.
Reuters reports:
Read more here.
China’s $1.3 trillion stock surge raises questions about staying power
Chinese stocks capped another strong week of gains, intensifying a debate over the fate of a rally that’s defied the nation’s economic troubles to add $1.3 trillion in market value just this month.
Bloomberg reports:
Read more here.
Gold pushes back towards record highs in second weekly gain.
Gold (GC=F) has seen consecutive weeks of gains to push back towards records set in April. Fears around the Fed’s independence and the upcoming inflationary report have made the precious metal an attractive prospect to investors seeking stability.
Bloomberg reports:
Read more here.
