Dow Futures Down 90 Pts; May CPI Report in Focus

© Reuters Dow Futures Down 90 Pts; May CPI Report in Focus

By Peter Nurse    

Investing.com — U.S. stocks are seen opening in a muted fashion Friday ahead of a highly anticipated consumer inflation report, which is likely to set the scene for next week’s Federal Reserve meeting.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 90 points, or 0.3%, S&P 500 Futures traded 7 points, or 0.2%, lower, while Nasdaq 100 Futures climbed 10 points, or 0.1%.

The May U.S. consumer price index will be released at 8:30 AM ET (1230 GMT), and is expected to rise 8.3% on the year, unchanged from the April annual figure, although record gasoline prices could offer upside risk. 

The core CPI number, which excludes volatile food and fuel prices, is expected to rise 5.9% on the year, a slight slowdown from the 6.2% rise in the previous reading.

Fed policymakers get together next week to decide on their next move on monetary tightening, having hiked interest rates by 75 basis points in total so far this year, and will be looking for signs inflation has peaked.  

The June Michigan consumer sentiment reading is also scheduled for later in the session, and is likely to provide a gauge of how the public is responding to persistently high inflation.

The main indices on Wall Street closed sharply lower on Thursday after the European Central Bank signaled that it is prepared to raise rates next month by a quarter-point and make another similar or larger move in September. 

The blue-chip Dow Jones Industrial Average dropped over 600 points, or 1.9%, the broad-based S&P 500 fell 2.4% and the tech-heavy Nasdaq Composite closed 2.8% lower. All three indices are on course for another lower week.

In corporate news, Stitch Fix (NASDAQ:SFIX) will be in the spotlight after the online personal styling service announced plans to cut its salaried workforce by around 15% in order to cut costs. 

DocuSign (NASDAQ:DOCU) stock is also seen sharply lower premarket after a weak earnings report, while Walt Disney (NYSE:DIS) announced a major leadership shift, firing its head of television.

Oil prices climbed Friday despite new lockdowns in Shanghai, with global supply tight and demand from the U.S., the world’s biggest consumer, remaining very healthy. 

Shanghai imposed new mobility curbs on Thursday after China’s largest economic hub recorded a cluster outbreak of COVID-19, raising concerns of reduced demand from the world’s largest crude importer.

That said, Brent was still on track for a fourth consecutive weekly gain and WTI for a seventh straight weekly increase. Both benchmarks posted their highest closes since March 8 on Wednesday, when they hit their highest settlements since 2008.

By 7 AM ET, U.S. crude futures traded 0.8% higher at $122.45 a barrel, while the Brent contract rose 0.8% to $124.06. 

Additionally, gold futures fell 0.4% to $1,844.80/oz, while EUR/USD traded 0.3% lower at 1.0586.