U.S. Stocks May Extend Rebound Following Tamer-Than-Expected Inflation Data

Stocks may move to the upside in early trading on Friday, extending the significant rebound seen in the previous session. The major index futures are currently pointing to a slightly higher open for the markets, with the S&P 500 futures up by 0.1 percent.

The futures turned positive following the release of a highly anticipated Commerce Department report showing consumer price growth in the U.S. slowed by more than expected in the month of November.

The report said the annual rate of consumer price growth decelerated to 2.6 percent in November from a downwardly revised 2.9 percent in October.

Economists had expected the pace of price growth to slow to 2.8 percent from the 3.0 percent originally reported for the previous month.

The annual rate of growth by core consumer prices, which exclude food and energy prices, also slowed to 3.2 percent in November from a downwardly revised 3.4 percent in October.

Economists had expected core consumer price growth to decelerate to 3.3 percent from the 3.5 percent originally reported for the previous month.

The readings on inflation, which are said to be preferred by the Federal Reserve, were include in the Commerce Department’s report on personal income and spending.

The bigger than expected slowdown in consumer price growth is likely to add to optimism the Fed is poised to pivot to cutting interest rates early next year.

Meanwhile, a steep drop by shares of Nike (NKE) may weigh on the Dow, with the athletic apparel and footwear giant plunging by 11.5 percent in pre-market trading.

The nosedive by Nike comes after the company lowered its revenue outlook and unveiled plans to cut $2 billion in costs over the next three years.

The Commerce Department released a separate report showing new orders for U.S. manufactured durable goods surged by much more than expected in the month of November.

The report said durable goods orders spiked by 5.4 percent in November after tumbling by a revised 5.1 percent in October.

Economists had expected durable goods orders to jump by 2.2 percent compared to the 5.4 percent nosedive that had been reported for the previous month.

Excluding a rebound in orders for transportation equipment, durable goods orders climbed by 0.5 percent in November after falling by 0.3 percent in October. Ex-transportation orders were expected to inch up by 0.1 percent.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of November.

Economists expect new home sales to climb to an annual rate of 685,000 in November after plunging to a rate of 679,000 in October.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of December.

The consumer sentiment index for December is expected to be unrevised from the preliminary reading of 69.4, which was up from 61.3 in November.

Following the sharp pullback seen late in Wednesday’s session, stocks showed a strong move back to the upside during trading on Thursday. The major averages all moved notably higher, largely offsetting Wednesday’s steep losses.

The major averages saw further upside going into the close, reaching new highs for the session. The Dow advanced 322.35 points or 0.9 percent to 37,404.35, the Nasdaq surged 185.92 points or 1.3 percent to 14,963.84 and the S&P 500 jumped 48.40 points or 1.0 percent to 4,746.75.

In overseas trading, stocks across the Asia-Pacific region turned in a lackluster performance during trading on Friday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.

Meanwhile, the major European markets have moved slightly higher on the day. While the U.K.’s FTSE 100 Index is just above the unchanged line, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In commodities trading, crude oil futures are climbing $0.67 to $74.56 a barrel after slipping $0.33 to $73.89 a barrel on Thursday. Meanwhile, after inching up $3.60 to $2,051.30 an ounce in the previous session, gold futures are jumping $21 to $2,072.30 an ounce.

On the currency front, the U.S. dollar is trading at 142.07 yen versus the 142.12 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1021 compared to yesterday’s $1.1011.