Inflation Data May Weigh On Wall Street

The major U.S. index futures are currently pointing to a lower open on Friday, with stocks likely to extend the pullback seen over the two previous sessions.

The futures came under pressure following the release of the Federal Reserve’s preferred readings on consumer price inflation.

While the Commerce Department report showed consumer prices increased in line with economist estimates, core consumer prices rose by slightly more than expected.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in February, matching the increases seen in the two previous months as well as economist estimates.

The annual rate of growth by the PCE price index was 2.5 percent in February, unchanged from January and in line with expectations.

Meanwhile, the report said the core PCE price index, which excludes food and energy prices, climbed by 0.4 percent in February after rising by 0.3 percent in January. Economists had expected another 0.3 percent increase.

The annual rate of growth by the core PCE price index also accelerated to 2.8 percent in February from an upwardly revised 2.7 percent in January.

Economists had expected the year-over-year growth by the core PCE price index to tick up to 2.7 percent from the 2.6 percent originally reported for the previous month.

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

After recovering from an initial move to the downside, stocks showed a lack of direction over the course of the trading session on Thursday. The major averages bounced back and forth across the unchanged line before eventually closing lower.

With the lower close on the day, the major averages extended the sharp pullback seen on Wednesday. The Nasdaq slid 94.98 points or 0.5 percent to 17,804.03, the Dow fell 155.09 points or 0.4 percent to 42,299.70 and the S&P 500 dipped 18.89 points or 0.3 percent to 5,693.31.

The lower close on Wall Street came amid ongoing concerns about President Donald Trump’s trade policies after he announced plans to impose 25 percent tariffs on auto imports.

Selling pressure was somewhat subdued, however, as the news may already have been priced into the markets after the White House revealed Trump would be making the announcement during the trading day on Wednesday.

Trump also told reporters on Wednesday that the reciprocal tariffs set to take effect on U.S. trade partners next week would be “very lenient.”

However, Trump also threatened in an early morning Truth Social post that he would impose far larger tariffs than currently planned “if the European Union works with Canada in order to do economic harm to the USA.”

Traders may also have been reluctant to make significant moves ahead of the release of the Federal Reserve’s preferred readings on consumer price inflation.

On the U.S. economic front, the Commerce Department released a report showing the economy grew slightly faster than previously estimated in the fourth quarter of 2024.

The Commerce Department said gross domestic product surged by 2.4 percent in the fourth quarter compared to the previously reported 2.3 percent jump. Economists had expected the pace of GDP growth to be unrevised.

A separate report released by the National Association of Realtors showed pending home sales saw a significant rebound in the month of February after plunging to an all-time low in January.

Semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.1 percent.

Considerable weakness was also visible among networking stocks, as reflected by the 1.9 percent slump by the NYSE Arca Networking Index.

Airline, computer hardware and financial stocks also ended the day notably lower, while gold stocks moved sharply higher along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are inching up $0.03 to $69.95 a barrel after rising $0.27 to $69.92 a barrel on Thursday. Meanwhile, after surging $38.60 to $3,090.90 an ounce in the previous session, gold futures are jumping $24.90 to $3,115.80 an ounce.

On the currency front, the U.S. dollar is trading at 150.66 yen versus the 151.05 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0780 compared to yesterday’s $1.0801.

Asia

Asian stocks ended mostly lower on Friday as investors held to the sidelines, awaiting cues from the release of the Fed’s preferred inflation gauge later in the day and the U.S. reciprocal tariffs set to take effect on April 2.

The dollar was steady in Asian trading and gold touched a new record high, while oil prices dipped slightly but hovered near one-month highs on supply concerns.

China’s Shanghai Composite Index fell 0.7 percent to 3,351.31 and Hong Kong’s Hang Seng Index dropped 0.7 percent to 23,426.60, as investors remained wary of U.S. tariff risks.

Japanese markets ended at a two-week low on concerns that Trump’s tariffs could hit domestic production and auto sector jobs.

Adding to investor anxiety, data showed Tokyo inflation quickened to 2.9 percent in March from 2.8 percent in February, keeping the Bank of Japan on a rate hike path.

The Nikkei 225 Index tumbled 1.8 percent to 37,120.33, while the broader Topix Index settled 2.1 percent lower at 2,757.25. Honda Motor and Toyota Motor fell 2.6 percent and 2.8 percent, respectively.

Seoul stocks fell sharply on trade war jitters. The Kospi slumped 1.9 percent to 2,557.98 ahead of a meeting of top trade officials from South Korea, Japan and China this weekend to discuss economic cooperation amid increasing trade pressure from the U.S.

Samsung Electronics, Posco Holdings and Hyundai Motor all fell around 3 percent, while Lotte Chemical plunged 5.6 percent.

Australian markets ended slightly higher as Prime Minister Anthony Albanese called an election for May 3, kicking off what’s expected to be a closely fought campaign.

The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 7,982, while the broader All Ordinaries Index settled 0.1 percent higher at 8,195.50. Gold miners topped the gainers list as bullion prices hit another record high.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended 0.2 percent lower at 12,287.46.

Europe

European shares drifted lower on Friday amid signs that U.S. President Donald Trump could be intensifying a broader trade war that could damage growth worldwide.

Meanwhile, German consumer sentiment is set to rise only marginally heading into April despite a revival in expectations regarding the economy after the new elections, a closely watched survey revealed earlier today.

The forward-looking consumer climate index rose to -24.5 in April from -24.6 in March, according to a survey jointly published by the market research group GfK and the Nuremberg Institute for Market Decisions.

Elsewhere, the British pound climbed after the release of positive retail sales and GDP data.

British retail sales unexpectedly climbed by 1 percent in February, surpassing expectations of a 0.4 percent decline, driven largely by higher spending on clothing and household goods.

The British economy expanded by 1.5 percent year-on-year for the fourth quarter, slightly above the 1.4 percent growth anticipated.

The German DAX Index and the French CAC 40 Index are both down by 0.6 percent, although the U.K.’s FTSE 100 Index has bucked the downtrend and risen by 0.2 percent.

French video game maker Ubisoft has moved sharply higher after Chinese gaming studio Tencent agreed to invest about 1.16 billion Euros (Approximately 1.3 billion USD) for a 25 percent stake in its subsidiary.

German lender Deutsche Bank has shown a notable move to the downside after extending CEO Christian Sewing’s contract.

U.S. Economic News

A report released by the Commerce Department on Friday showed U.S. consumer prices increased in line with economist estimates in the month of February, although core consumer prices rose by slightly more than expected.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in February, matching the increases seen in the two previous months as well as economist estimates.

The annual rate of growth by the PCE price index was 2.5 percent in February, unchanged from January and in line with expectations.

Meanwhile, the report said the core PCE price index, which excludes food and energy prices, climbed by 0.4 percent in February after rising by 0.3 percent in January. Economists had expected another 0.3 percent increase.

The annual rate of growth by the core PCE price index also accelerated to 2.8 percent in February from an upwardly revised 2.7 percent in January.

Economists had expected the year-over-year growth by the core PCE price index to tick up to 2.7 percent from the 2.6 percent originally reported for the previous month.

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 increased by 0.8 percent in February after climbing by 0.7 percent in January, while personal spending rose by 0.4 percent in February after falling by 0.3 percent in January.

At 10 am ET, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of March. The consumer sentiment index for March is expected to be unrevised from the preliminary reading of 57.9, which was down from 64.7 in February and marked its lowest level since November 2022.

Federal Reserve Board Governor Michael Barr is due to participate in a “Banking Policy” discussion at the 2025 Banking Institute event hosted by the University of North Carolina Law School at 12:15 pm ET.

At 3:45 pm ET, Atlanta Federal Reserve President Raphael Bostic is scheduled to moderate a “U.S. Housing Finance Policy” panel before the Third Annual Georgia Tech-Atlanta Fed Household Finance Conference.