NEW YORK, 28th June, 2024 (WAM) -- Wall Street pointed toward a modestly higher open Friday ahead of a key report on inflation that could influence the Federal Reserve's next decision on interest rates.
Futures for the Dow Jones Industrial Average gained 0.1 percent and futures for the S&P 500 rose nearly 0.4 percent, the Associated Press reported.
Nike shares tumbled 15 percent after the shoe and athletic wear company missed Wall Street's revenue targets and cut its full-year sales guidance. Company executives said they expect sales to decline by single digits in the current fiscal year, citing a “challenging” environment.
Nike's dour outlook dragged other athletic apparel companies down with it. Foot Locker fell 5.7 percent, Skechers lost 3.7 percent and Under Armour was down 2.8 percent in off-hours trading.
PCE impact
The U.S. stock market has been listless this week in the lead up to Friday’s release of the next influential inflation report from the government. The personal consumption expenditures index, or PCE, is the Fed’s preferred measure of inflation.
Economists expect the report to show a modest easing of inflation to 2.6 percent in May, following a 2.7 percent reading in April. That is down from the PCE’s peak of 7.1 percent in the middle of 2022. Other measures of inflation, including the consumer price index, have also eased significantly over the last two years.
The latest updates on inflation could influence the central bank’s decision on when to begin cutting interest rates, which remain at their highest level in more than 20 years and which are having an impact worldwide. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.
US economy expands
An update from the government said the American economy expanded at a 1.4 percent annual pace from January through March. The figure is a slight revision from a prior estimate of 1.3 percent. It marks the slowest quarterly growth since spring 2022.
A slowdown in consumer spending could help further ease inflation, but too much of a slowdown could result in a more painful hit to the economy. The Federal Reserve is trying to time its efforts tame inflation back to its 2 percent target without slowing the economy so much that it slips into a recession.
Erope, Asia markets
France's CAC 40 slipped 0.4 percent at midday trading in Europe, while Germany's DAX added 0.6 percent. Britain's FTSE 100 rose 0.5 percent.
In Asia, Japan's benchmark Nikkei 225 rose 0.6 percent to finish at 39,583.08. Australia's S&P/ASX 200 rose 0.1 percent to 7,767.50. South Korea's Kospi edged 0.5 percent higher to 2,797.82. Hong Kong's Hang Seng was little changed, inching up less than 0.1 percent to 17,718.61, while the Shanghai Composite surged 0.7 percent to 2,967.40.
In Japan, the government reported industrial production was stronger than forecast in May at 2.8 percent and the unemployment rate was unchanged from the previous month at 2.6 percent.
Energy, Forex
In energy trading, benchmark U.S. crude rose 77 cents to US$82.51 a barrel. Brent crude, the international standard, added 65 cents to US$85.91 a barrel.
In currency trading, the U.S. dollar fell to 160.63 Japanese yen from 160.77 yen. The euro cost US$1.0701, down from US$1.0704.
On Thursday, the S&P 500 edged up 0.1 percent and the Nasdaq composite added 0.3 percent. The Dow Jones Industrial Average rose 0.1 percent.