Stock Futures Pare Losses After Benign Inflation Reading

Stock futures narrowed their losses Friday after a better-than-expected inflation reading, as investors brace for more volatility to cap off the week. 

Futures tied to the Dow Jones Industrial Average were down 0.3% in recent trading, while those linked to the S&P 500 and Nasdaq tumbled 0.5% and 0.8%, respectively. U.S. stocks closed near unchanged on Thursday after a steep downturn the previous session sparked by news the Federal Reserve expects to slow the pace of interest rate cuts next year amid concerns about inflation.

The Personal Consumption Expenditures index, which is the Fed’s preferred measure of inflation, came in lower than economists had estimated, is welcome news for the central bank and for markets.

The yield on 10-year Treasurys, which is correlated with expectations about where interest rates are headed, was at 4.50% after the inflation data, down from yesterday’s closing level of 4.57%.

Investors are also keeping a close eye on developments in Washington D.C. as lawmakers work to avoid a government shutdown. Adding to the possibility of volatility, Friday is a triple-witching day, which refers to the simultaneous expiration of stock options, index options, and index futures contracts.

Large cap tech stocks were down across the board in premarket trading Friday, though they were well off their earlier lows. Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META) and Tesla (TSLA) were all losing ground.

Among other big movers before the bell, Nike (NKE) shares were down 6% after the athletic apparel maker released its first earnings report under new CEO Elliott Hill, with results that topped expectations but a sluggish outlook. U.S.-listed shares of Novo Nordisk (NVO), maker of popular weight-loss drugs Ozempic and Wegovy, were down 20% after disappointing trial results for a new obesity shot.

FedEx (FDX) is the big gainer this morning, with shares rising more than 8% after the shipping giant announced plans to spin off its freight business as a separate public company, overshadowing a lowered full year outlook.

Bitcoin was at $95,300 recently, up from an earlier low of around $92,000 but well below the record high of around $108,000 set earlier this week.

Gold futures were up slightly at around $2,630 an ounce, while crude oil futures were down about 0.5%.