Nasdaq and S&P 500 futures rose Friday on hopes of moderating inflation in a closely watched report from the Federal Reserve, while shares of Trump Media & Technology Group jumped after Joe Biden’s weak performance 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 increasing 0.1%. after a gain of 0.2% the previous month.
Deutsche Bank analysts expect the year-over-year PCE index to hit 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 spike in inflation seen in the first quarter.
Even though the Fed expects only one interest rate cut this year in December, market participants still expect two cuts starting in September, hoping for a lasting downward trend to pressure on prices and because 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 were up slightly in premarket trading.
At 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 Nasdaq 100 e-minis were up 76 points, or 0.38%.
The S&P 500 and Nasdaq indexes were both on track for gains in a week marked by a short-lived rout in artificial intelligence stocks, Amazon.com reaching a market value of $2 trillion for the first time, quarterly profits from companies including 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 faltering and halting performance on Thursday, while his rival Trump assailed him with a series of often false attacks during their debate, ahead of November’s election.
“As the presidential debate clearly illustrated, the prospect of a Trump presidency is generating significant enthusiasm in financial markets,” said Nigel Green, CEO of the deVere Group.
“Wall Street perceives that policies likely to be implemented under a Trump administration could be vastly more beneficial.”
Investors also braced for the final reconstitution of Russell benchmarks during the day, with the furious rally in AI-related stocks expected to leave a considerable imprint on their final form.
Among others, Nike fell 14.2% after reporting a surprise drop in revenue for fiscal 2025. Rivals On and Under Armour, backed by Roger Federer, also fell more than 2% each . (Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
