Dow futures fall 175 pts; core PCE index in spotlight

By Peter Nurse

Investing.com -- U.S. stocks are seen opening lower Friday, ending the week on a fragile note ahead of the release of widely-anticipated inflation data which could trigger further interest rate increases.

At 07:00 ET (12:00 GMT), the Dow futures contract was down 175 points, or 0.5%, S&P 500 futures traded 24 points, or 0.6% lower, and Nasdaq 100 futures fell 108 points, or 0.9%.

The major indices closed higher on Thursday, but are heading towards a losing week as investors fret that elevated inflation will force the U.S. Federal Reserve to continue raising interest rates, likely weighing on future economic activity.

The blue-chip Dow Jones Industrial Average is down 2% this week, on course for its fourth straight losing week. The broad-based S&P 500 is 1.6% lower, set for its worst week since mid-December, while the tech-heavy Nasdaq Composite is down 1.7%.

Global equity funds lost $7 billion in outflows in the week through Feb. 22, while $3.8B left cash funds, according to a note from Bank of America, citing EPFR Global data, as investors positioned for the risk that the Federal Reserve retains a hawkish bent.

The Fed is widely expected to raise rates another quarter of a percentage point when it meets in March, followed by another in May and possibly also in June, pushing the terminal rate to 5.2% or above.

The core personal consumption index, the Fed’s favorite gauge of inflation, is due later this session, and could provide more ammunition for the U.S. central bank to continue pushing interest rates higher.

The index, due at 08:30 ET (13:30 GMT), is expected to be up 0.4% on a month-on-month basis, a rise of 4.3% on a year earlier, compared with 4.4% the previous month, suggesting inflation is proving to be hard to tame.

Data on personal income and spending as well as the University of Michigan consumer sentiment index are also due for release Friday, while comments from Fed speakers Loretta Mester, Philip Jefferson, and Susan Collins will also be studied.

In the corporate sector, Boeing (NYSE:BA) stock fell premarket after the Federal Aviation Administration said on Thursday that the planemaker has temporarily halted deliveries of its 787 Dreamliner jets as it conducts analysis on a fuselage component.

Beyond Meat (NASDAQ:BYND) stock soared over 14% premarket after the plant-based meat maker reported a smaller-than-expected net loss in the fourth quarter.

Oil prices rose Friday following a Reuters report that Russia plans to cut up to 25% of oil exports from its western ports in March, which is more than the 500,000 barrel per day supply cut announced earlier.

This news has overshadowed the announcement of another increase in U.S. oil stocks, with data from the Energy Information Administration showing inventories grew for a ninth consecutive week to their highest level since May 2021.

By 07:00 ET, U.S. crude futures traded 0.4% higher at $75.69 a barrel, while the Brent contract rose 0.5% to $82.64. Both contracts were trading down around 0.5% for the week, having clawed back earlier heavy losses.

Additionally, gold futures fell 0.1% to $1,824.75/oz, while EUR/USD dropped 0.2% to 1.0575.