U.S. Stocks May See Initial Strength Following Inflation Data

Following the mixed performance seen in the previous session, stocks are likely to move mostly higher in early trading on Friday. The major index futures are currently pointing to initial strength on Wall Street, with the S&P 500 futures up by 0.8 percent.

The futures remained firmly positive following the release of a highly anticipated Commerce Department report showing consumer prices in the U.S. crept up in line with economist estimates in the month of June.

The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in June after coming in unchanged in May. The uptick by the index matched expectations.

The report also said the annual rate of growth by the PCE price index slowed to 2.5 percent in June from 2.6 percent in May. The slowdown in year-over-year growth also met estimates.

Meanwhile, the Commerce Department said the core PCE price index, which excludes food and energy prices, rose by 0.2 percent in June after inching up by 0.1 percent in May. Economists had expected another 0.1 percent uptick.

The annual rate of growth by the core PCE price index was unchanged from the previous month at 2.6 percent in June, while economists had expected the pace of growth to slow to 2.5 percent.

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

The report showed personal income rose by less than expected, while personal spending increased in line with economist estimates.

The markets may also benefit from bargain hunting after the tech-heavy Nasdaq and the S&P 500 fell to their lowest closing levels in over a month on Thursday.

U.S. stocks saw some heavy selling in the final hour of the session on Thursday as the mood turned a bit cautious amid concerns about mega-cap firms’ earnings.

Among the major averages, the Dow managed to settle higher, gaining 81.20 points or 0.2 percent to close at 39,935.07, a long way down from the day’s high of 40,438.82. The S&P 500, which advanced to 5,491.59, ended nearly 100 points down from that level, at 5,399.22, losing 27.91 points or 0.5 percent.

The Nasdaq ended with a loss of 160.69 points or 0.9 percent at 17,181.72, coming off a high of 17,544.46.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.5 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has climbed by 0.5 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.9 percent.

In commodities trading, crude oil futures are falling $0.38 to $77.90 a barrel after climbing $0.69 to $78.28 a barrel on Thursday. Meanwhile, after plummeting $62.20 to $2,353.50 an ounce in the previous session, gold futures are jumping $21.10 to $2,374.60 an ounce.

On the currency front, the U.S. dollar is trading at 154.31 yen versus the 153.95 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0857 compared to yesterday’s $1.0846.

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