Inflation Data In Line With Estimates May Generate Early Buying Interest

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground following the sell-off seen over the course of the previous session.

Traders may once again look to pick up stocks at reduced levels following recent weakness, which saw the Nasdaq plunge to a nearly four-month closing low in Thursday’s session.

The Dow and the S&P 500 also ended the previous session at their lowest closing levels in over a month amid a slump by shares of Nvidia (NVDA).

Early buying interest may also be generated in reaction to a Commerce Department report showing closely watched readings on U.S. consumer price inflation increased in line with economist estimates in the month of January.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in January, matching the increase seen in December as well as economist estimates.

The annual rate of growth by the PCE price index slowed to 2.5 percent in January from 2.6 percent in December, which also matched expectations.

Excluding food and energy prices, the core PCE price still climbed by 0.3 percent in January after edging up by 0.2 percent in December. The increase by core prices was also in line with estimates.

The annual rate of core PCE price growth slowed to 2.6 percent in January from 2.9 percent in December, which also matched expectations.

The Federal Reserve’s preferred readings on consumer price inflation were included in the Commerce Department’s report on personal income and spending.

However, traders may remain reluctant to get back into the markets amid lingering concerns about a global trade war.

After President Donald Trump threatened to impose an additional 10 percent tariff on imports from China as early as next Tuesday, China vowed to take “all necessary countermeasures and defend its legitimate rights and interests.”

Stocks once again failed to sustain an early upward move and came under pressure over the course of the trading day on Thursday. Unlike the previous session, however, the major averages extended the pullback as the day progressed, closing sharply lower.

The tech-heavy Nasdaq posted a particularly steep loss, plunging 530.84 points or 2.8 percent to a nearly four-month closing low of 18,544.41.

The S&P 500 also slumped 94.49 points or 1.6 percent to a one-month closing low of 5,861.57, while the narrower Dow fell 193.62 points or 0.5 percent to a one-month closing low of 43,239.50.

Stocks initially benefited from a positive reaction to earnings news from Nvidia, which reported better than expected fourth quarter results and provided upbeat revenue guidance for the current quarter.

However, shares of Nvidia subsequently tumbled by 8.5 percent as the AI darling and market leader also warned about increase global competition.

The sell-off on Wall Street also came as President Donald Trump clarified that previously paused 25 percent tariffs on imports from Mexico and Canada will go into effect on March 4th.

Trump said an additional 10 percent tariff on imports from China will also be imposed on that date, claiming drugs are pouring into the U.S. from Mexico and Canada and that a large percentage of the drugs are supplied by China.

The president also said in a Truth Social post that the April 2nd date for reciprocal tariffs on other U.S. trade partners will “remain in full force and effect.”

Traders were also reacting to the latest batch of U.S. economic data, including a Labor Department report showing first-time claims for U.S. unemployment benefits climbed much more than expected in the week ended February 22nd.

A separate report released by the Commerce Department showed durable goods orders surged by much more than expected in January, although the growth was largely due to a spike in volatile orders for transportation equipment.

Semiconductor stocks saw substantial weakness on the day, resulting in a 6.1 percent nosedive by the Philadelphia Semiconductor Index. The index plunged to its lowest closing level in over five months.

Considerable weakness was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index plummeting by 5.1 percent

Gold stocks also moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 3.8 percent.

Utilities, software and airline stocks also saw significant weakness on the day, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are sliding $0.80 to $69.55 a barrel after surging $1.73 to $70.35 a barrel on Thursday. Meanwhile, after plunging $34.70 to $2,895.90 an ounce in the previous session, gold futures are tumbling $27.80 to $2,868.10 an ounce.

On the currency front, the U.S. dollar is trading at 150.75 yen versus the 149.81 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0409 compared to yesterday’s $1.0388.

Asia

Asian stocks plummeted on Friday as traders grappled with underwhelming Nvidia Corp. results and U.S. President Donald Trump’s new tariff threats.

China vowed to take “all necessary countermeasures and defend its legitimate rights and interests” after Trump said he would impose an additional 10 percent tariff on Chinese imports, intensifying a brewing trade war between the world’s two largest economies.

The additional tariff will come into effect on Tuesday alongside sweeping 25 percent levies on Canadian and Mexican imports.

Traders also awaited the release of the Federal Reserve’s preferred inflation gauge, the PCE price index, later in the day for additional clues on the Fed’s rate trajectory in 2025.

The dollar held gains from Thursday as concerns over a potential global trade war heightened. Treasuries held steady in Asian trading after selling slightly at the long end of the curve Thursday. Gold dipped but was on track for a 2 percent monthly gain.

Oil prices headed for their first monthly drop since November on concerns that the U.S. trade war may hurt global growth, worsen inflation and possibly spark recessions in some countries.

China’s Shanghai Composite Index dove 2.0 percent to 3,320.90 and Hong Kong’s Hang Seng Index plummeted 3.3 percent to 22,941.32 on trade war fears.

Japanese markets plunged amid tariff concerns and after the release of mixed industrial production, retail sales and inflation readings.

The Nikkei 225 Index tumbled 2.9 percent to 37,155.50, marking a five-month low amid much uncertainty over how the earnings of companies operating overseas would be affected by the U.S. tariff policies.

The broader Topix Index settled 2.0 percent lower at 2,682.09, pressured by selling of semiconductor-linked shares such as Advantest, Tokyo Electron and SoftBank Group.

Seoul stocks lost ground as a sharp decline by Nvidia shares on Wall Street overnight triggered heavy selling by foreign and institutional investors.

The Kospi plunged 3.4 percent to 2,532.78, with heavyweights including Samsung Electronics, SK Hynix and LG Energy Solution falling 3-5 percent.

Australian markets fell sharply, dragged down by technology and mining stocks. The benchmark S&P/ASX 200 Index slumped 1.2 percent to 8,172.40, while the broader All Ordinaries Index closed 1.2 percent lower at 8,403.90.

Star Entertainment shares plunged over 15 percent after the casino operator missed the deadline to post its half-yearly results and announced there are serious doubts about its ability to continue operating.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.5 percent to 12,601.42, extending gains for a third straight session but logging its biggest monthly loss since 2023.

Europe

European shares have moved mostly lower on Friday as U.S. President Donald Trump confirmed sweeping 25 percent tariffs on goods from Canada and Mexico, along with an additional 10 percent tariffs on Chinese imports, will take effect on March 4.

Trump has also threatened the EU with steep tariffs but signaled the U.K. could broker a “real trade deal” and escape tariffs.

In economic news, German retail sales rose 0.2 percent sequentially in January after a 1.6 percent drop in December, according to official data from Destatis. The number of people out of work in Germany rose in February but at a slower rate than expected.

Elsewhere, U.K. house price grew at a pace of 0.4 percent on a monthly basis in February after a 0.1 percent gain in the previous month, the Nationwide Building Society reported.

The French CAC 40 Index and the German DAX Index are both down by 0.6 percent, although the U.K.’s FTSE 100 Index has once again bucked the downtrend and risen by 0.3 percent.

Car parts supplier Valeo has plunged as CEO Christophe Perillat warned of a marginal impact on earnings from U.S. tariffs on steel and aluminum.

BASF has also slumped. The chemicals giant has warned of challenges such as high geopolitical and trade policy uncertainty after posting an adjusted EBITDA of €1.57 billion, slightly below market expectations.

On the other hand, British Airways owner IAG has surged after reporting a second consecutive year of record profits.

Education firm Pearson has also jumped following the announcement of a £350 million share buyback program and a solid set of results.

German insurer Allianz was marginally higher after delivering another set of record financial results underpinned by strong performance across all segments.

U.S. Economic News

Closely watched readings on U.S. consumer price inflation increased in line with economist estimates in the month of January, according to a report released by the Commerce Department on Friday.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in January, matching the increase seen in December as well as economist estimates.

The annual rate of growth by the PCE price index slowed to 2.5 percent in January from 2.6 percent in December, which also matched expectations.

Excluding food and energy prices, the core PCE price still climbed by 0.3 percent in January after edging up by 0.2 percent in December. The increase by core prices was also in line with estimates.

The annual rate of core PCE price growth slowed to 2.6 percent in January from 2.9 percent in December, which also matched expectations.

The Federal Reserve’s preferred readings on consumer price inflation were included in the Commerce Department’s report on personal income and spending.

The report said personal income grew by 0.9 percent in January after rising by 0.4 percent in December, while personal spending dipped by 0.2 percent in January after climbing by 0.8 percent in December.

At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of February. The Chicago business barometer is expected to inch up to 40.6 in February from 39.5 in January, but a reading below 50 would still indicate contraction.

Chicago Federal Reserve President Austan Goolsbee is due to participate in a moderated question-and-answer session before the Stanford Institute of Economic Policy Research 2025 SIEPR Economic Summit at 10:15 pm ET.