U.S. Stocks May Regain Ground As Inflation Data Matches Estimates

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground after trending lower over the past few sessions.

Traders may look to pick up stocks at relatively reduced levels following the recent pullback, which partly reflected concerns about valuations and the near-term outlook for the artificial intelligence trade.

The futures saw further upside following the release of a closely watched Commerce Department report showing consumer prices increased in line with economist estimates in the month of August.

The report said the personal consumption expenditures (PCE) price index climbed by 0.3 percent in August after rising by 0.2 percent in July. The price growth matched expectations.

The annual rate of growth by the PCE price index ticked up to 2.7 percent in August from 2.6 percent in July, which was also in line with estimates.

Excluding food and energy prices, the core PCE price index rose by 0.2 percent in August, matching a revised increase in July as well as expectations.

The annual rate of growth by the core PCE price index came in at 2.9 percent in August, unchanged from July an in line with estimates.

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

Meanwhile, traders have seemingly shrugged off the news of a fresh batch of tariffs announced by President Donald Trump.

Trump announced in a post on Truth Social that he will be imposing a 100 tariff on pharmaceuticals unless the company is building a manufacturing plant in the U.S.

The president also announced a 25 percent tariff on heavy trucks and a 50 percent tariff on kitchen cabinets, bathroom vanities and associated products, with the new tariffs set to take effect October 1st.

Following the pullback seen over the two previous sessions, stocks saw further downside during trading on Thursday. The major averages continued to give back ground after ending Monday's trading at new record closing highs.

The major averages ended the day well off their lows of the session but still firmly negative. The Nasdaq slid 113.16 points or 0.5 percent to 22,384.70, the S&P 500 declined 33.25 points or 0.5 percent to 6,604.72 and the Dow fell 173.96 points or 0.4 percent to 45,947.32.

The continued weakness on Wall Street partly reflected ongoing concerns about the near-term outlook for the artificial intelligence trade.

AI player Oracle (ORCL) plunged by 5.6 percent on the day, although shares of Nvidia (NVDA) saw modest strength after moving notably lower over the two previous sessions.

Renewed uncertainty about the outlook for interest rates also weighed on the markets following the release of some upbeat U.S. economic data.

A report released by the Labor Department unexpectedly showed an extended pullback by first-time claims for U.S. unemployment benefits in the week ended September 20th.

The Labor Department said initial jobless claims fell to 218,000, a decrease of 14,000 from the previous week's revised level of 232,000. Economists had expected jobless claims to inch up to 235,000.

Jobless claims pulled back further off the nearly four-year high set in the first week of September, falling to their lowest level since hitting 217,000 in the week ended July 19th.

The Commerce Department also released separate reports showing an unexpected surge by durable goods orders in August as well as much stronger than previously estimated GDP growth in the second quarter.

"The Fed's September dot plot indicated that additional rate cuts are likely at their next two decisions in late October and December, but the case for back-to-back cuts is no slam dunk," said Bill Adams, Chief Economist for Comerica Bank.

Airline stocks moved sharply lower over the course of the session, with the NYSE Arca Airline Index tumbling by 2.9 percent to its lowest closing level in over a month.

Significant weakness was also visible among pharmaceutical stocks, as reflected by the 2.0 percent slump by the NYSE Arca Pharmaceutical Index. The index also ended the session at a one-month closing low.

Biotechnology, healthcare and computer hardware stocks also saw considerable weakness, while gold stocks bucked the downtrend amid an uptick by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are creeping up $0.04 to $65.02 a barrel after edging down $0.01 to $64.98 a barrel on Thursday. Meanwhile, after inching up $3 to $3,771.10 an ounce in the previous session, gold futures are rising $13.90 to $3,785 an ounce.

On the currency front, the U.S. dollar is trading at 149.64 yen versus the 149.80 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1676 compared to yesterday's $1.1666.

Asia

Asian stocks declined on Friday as the outlook for U.S. interest rates remained uncertain and the Trump administration announced a new round of tariff measures, including 100 percent duties on imported branded drugs, 25 percent tariffs on heavy-duty trucks and 50 percent tariffs on kitchen cabinets. All new duties will take effect on October 1.

Following stronger-than-expected economic data released overnight, investors also waited key U.S. inflation readings later in the day for more clues on the outlook for rates.

Chinese markets ended notably lower, with the benchmark Shanghai Composite Index closing down 0.7 percent at 3,828.11 after the S&P 500 dropped for a third straight session overnight, marking the longest slide in a month. Hong Kong's Hang Seng Index tumbled 1.4 percent to 26,128.20 on valuation and tariff jitters.

Japanese markets ended sharply lower, with pharma and chip-related shares pacing the declines. Data showed consumer prices in Tokyo grew less than expected in September, but analysts said the chance of a rate hike in October cannot be ruled out.

The Nikkei 225 Index slid 0.9 percent to 45,354.99, but the broader Topix Index finished marginally higher at 3,187.02, reaching a record closing high.

Sumitomo Pharma and Chugai Pharmaceutical fell 3-5 percent, while Lasertec and Sumco both plunged around 8 percent.

Seoul stocks tumbled on escalating concerns over protracted tariff negotiations with the United States and due to profit taking ahead of the Chuseok holiday.

The Kospi plummeted 2.5 percent to 3,386.05, falling below the 3,400 level for the first time in 10 trading days. Pharma stocks led losses, with SK Biopharmaceuticals falling 3.5 percent.

Australian markets ended slightly higher as strong copper prices boosted mining stocks, helping offset losses in the healthcare sector, with biotechnology firm CSL ending 1.9 percent lower.

The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 8,787.70, while the broader All Ordinaries Index closed up 0.2 percent at 9,079.20.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.3 percent to 13,111.73, marking its second straight session of losses.

Europe

European stocks have moved mostly higher during trading on Friday despite U.S. President Donald Trump's latest tariff threats.

The French CAC 40 Index is up by 0.8 percent, the German DAX Index is up by 0.6 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

Shares in Brunello Cucinelli have slumped to extend losses from the previous session after a short seller accused the company of misleading shareholders and regulators about its Russia operations, which the Italian cashmere brand denied.

Volvo shares have jumped in Stockholm, while Frankfurt-listed Daimler Truck and Traton have tumbled after Trump proposed 25 percent tariff on heavy trucks.

U.S. Economic News

The Commerce Department released a report on Friday showing consumer prices in the U.S. increased in line with economist estimates in the month of August.

The report said the personal consumption expenditures (PCE) price index climbed by 0.3 percent in August after rising by 0.2 percent in July. The price growth matched expectations.

The annual rate of growth by the PCE price index ticked up to 2.7 percent in August from 2.6 percent in July, which was also in line with estimates.

Excluding food and energy prices, the core PCE price index rose by 0.2 percent in August, matching a revised increase in July as well as expectations.

The annual rate of growth by the core PCE price index came in at 2.9 percent in August, unchanged from July an in line with estimates.

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 climbed by 0.4 percent in August, matching the increase seen in July, while personal spending grew by 0.6 percent in August after rising by 0.5 percent in July.

At 9 am ET, Richmond Federal Reserve President Thomas Barkin is scheduled to speak before the Peterson Institute for International Economics.

The University of Michigan is due to release its revised reading on consumer sentiment in the month of September at 10 am ET. The consumer sentiment index for September is expected to be unrevised from the preliminary reading of 55.4, which was down from 58.2 in August.

At 1 pm ET, Federal Reserve Vice Chair for Supervision Michelle Bowman is scheduled participate in a conversation on the "Approach to Monetary Policy Decision-Making" at the Cornell Club of New York.