The rally in US stocks hit pause before the bell on Friday as investors marked time ahead of an inflation report seen as crucial to the Federal Reserve’s next decision on interest-rate cuts.
S&P 500 futures (ES=F) were little changed on the heels of ekeing out a third record-high close this week, while Dow Jones Industrial Average futures (YM=F) were similarly flat. Contracts on the tech-heavy Nasdaq 100 (NQ=F) fell 0.2%.
The gauges are still on track for a weekly win as confidence in the economy returned to the market. A solid GDP reading cemented growing conviction that the Fed can nail a “soft landing” as it embarks on a rate-cutting campaign. But investors are still on watch for fresh data as they debate the pace of the easing.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
The August reading of the Personal Consumption Expenditures (PCE) index, the inflation metric favored by the Fed, is seen as crucial to those calculations. While policymakers have shifted their focus to the labor market, they still haven’t met their inflation goal of 2%.
Analysts expect the PCE print to come in at 2.3% year-over-year, down from 2.5% for July, when it’s released at 8:30 am ET. That would support the Fed’s decision to lower rates by 50 basis points last week and provide scope for another jumbo cut in November. But any sign of sticky price pressures could revive worries that policymakers have stepped off the brakes too early.
Elsewhere, China added to its stream of stimulus measures, boosting markets once again. Mainland stocks scored their biggest weekly win since 2008, and luxury stocks are set for their best week in years as hopes for Chinese demand rise. Meanwhile, shares of Alibaba (BABA, 9988.HK), JD.com (JD, 9618.HK) and Meituan (3690.HK, MPNGY) surged amid the buying spree.
In other individual stock moves, Costco (COST) stock slipped in premarket trading after wholesale giant’s revenue disappointed Wall Street.
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