Stocks are poised to rebound in early trading on Friday, recovering from notable declines over the past two sessions. Major index futures indicate a modestly higher market opening, with S&P 500 futures up by 0.2 percent.
This optimism follows a much-anticipated report from the Commerce Department, revealing that consumer prices in the U.S. increased as economists had expected in April. Additionally, core consumer prices rose slightly less than anticipated.
Specifically, the Commerce Department reported that the personal consumption expenditures (PCE) price index climbed by 0.3 percent for the third consecutive month in April, aligning with economist forecasts.
On the other hand, the core PCE price index—which excludes food and energy prices—grew by 0.2 percent in April, slightly down from the 0.3 percent rise in March. Economists had predicted another 0.3 percent increase.
The annual growth rates for both the PCE price index and the core PCE price index remained steady at 2.7 percent and 2.8 percent, respectively, meeting expectations.
These inflation readings, favored by the Federal Reserve, were part of the Commerce Department's report on personal income and spending. The smaller-than-expected monthly increase in core prices could renew optimism about the interest rate outlook, though unchanged annual growth rates may temper hopes for a near-term rate cut.
Shortly after trading begins, MNI Indicators will release its report on Chicago-area business activity for May. The Chicago business barometer is projected to increase to 41.0 in May from 37.9 in April, although a reading below 50 still signals contraction.
Following a mostly lower close on Wednesday, stocks saw further losses on Thursday. Major averages ended firmly in negative territory, with the Dow reaching its lowest closing level in almost a month.
The Nasdaq and the S&P 500 also hit new session lows before regaining some ground by the close. The Dow dropped 330.06 points or 0.9 percent to 38,11.48, the Nasdaq fell 183.50 points or 1.1 percent to 16,737.08, and the S&P 500 declined 31.47 points or 0.6 percent to 5,235.48.
In overseas markets, Asia-Pacific stocks showed a mixed performance on Friday. Japan's Nikkei 225 Index rose by 1.1 percent, while Hong Kong's Hang Seng Index fell by 0.8 percent.
European markets also displayed mixed results. The U.K.'s FTSE 100 Index climbed by 0.6 percent, whereas the French CAC 40 Index saw a slight decline, and Germany's DAX Index fell by 0.1 percent.
In commodities trading, crude oil futures edged up by $0.07 to $77.98 a barrel after falling $1.32 to $77.91 a barrel on Thursday. Meanwhile, gold futures rose by $3.30 to $2,369.80 an ounce after increasing by $2.40 to $2,366.50 an ounce in the previous session.
On the currency front, the U.S. dollar is trading at 156.88 yen, slightly up from 156.82 yen at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0875 compared to yesterday's $1.0832.
