U.S. Stocks May Extend Pullback Following Inflation Data

After ending yesterday’s choppy trading session mostly lower, stocks are likely to see further downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

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.

Shortly after the start of trading, 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.

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.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.8 percent, while China’s Shanghai Composite Index slid by 0.7 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index and the French CAC 40 Index are both down by 0.6 percent.

In commodities trading, 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.