U.S. stock futures struggled for direction Friday morning as investors awaited an update on inflation, which is expected to hover near a 40-year high amid elevated prices for gas, food and a variety of other goods and services.
Contracts on the S&P 500 and Dow were each off by about 0.2% in pre-market trading. Nasdaq futures traded flat to slightly higher. Treasury yields rose along the short-end of the curve, while the benchmark 10-year yield steadied around 3.03%. U.S. crude oil prices rose 0.7% to trade above $122 per barrel, holding near the highest level since March.
For market participants, the Bureau of Labor Statistics’ 8:30 a.m. release of the Consumer Price Index (CPI) will be a key print, offering a fresh look at the extent to which price increases have persisted across the U.S. economy. Consensus economists are looking to see inflation rose 8.3% year-on-year in May, according to Bloomberg, matching April’s clip and coming in just a hair below March’s more than 40-year high rate of 8.5%.
CPI is also likely to accelerate to a 0.7% month-over-month clip in May from April’s 0.3% rise, tracking a surge in gas prices heading into the summer travel season. Core inflation, which excludes volatile food and energy prices, is expected to edge down only modestly to a 5.9% annual gain from April’s 6.2%.
Inflation has remained a dominant issue for investors, policymakers and the American public this year. Higher prices have threatened to weigh on consumer spending — the key driver of U.S. economic activity — as goods and services become increasingly unaffordable. And inflation has already shown signs of triggering a rotation from spending on some discretionary goods to other purchase areas.
And for investors, inflation has also become a key determinant in the path forward for the Federal Reserve’s monetary policies. As the Fed aims to help bring down fast-rising prices, the central bank is widely expected to raise interest rates by another half-point at next week’s policy-setting meeting, further increasing the cost of borrowing and doing business for companies.
Amid these concerns over inflation’s impact on the economy and Fed’s next moves, stocks have continued to trade choppily. Each of the three major averages was on track to post a back-to-back week of losses, based on Thursday’s closing prices. The S&P 500 headed for a weekly decline of about 2%.
“At the end of the day, markets are just faced with a whole lot of uncertainty right now. And it’s not just that inflation story,” Jack Manley, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live. “We have still some uncertainty, some lack of clarity around what the Fed is going to do. The war in Europe continues to rage. And we know there are new developments happening on that front every few days.”
“There’s a lot to digest right now. And without any sort of real clarity on these things, it’s hard for markets to meaningfully move higher or lower,” he added. “It’s all markets really want at the end of the day, is news. And no news is bad news.”
7:14 a.m. ET: Stock futures mixed before inflation data
Here were the main moves in markets as of 7:14 a.m. ET:
S&P 500 futures (ES=F): -6.25 points (-0.16%) to 4,010.00
Dow futures (YM=F): -85 points (-0.26%) to 32,178.00
Nasdaq futures (NQ=F): +6.25 points (+0.05%) to 12,281.25
Crude (CL=F): +$0.94 (+0.77%) to $122.45 a barrel
Gold (GC=F): -$8.20 (-0.44%) to $1,844.60 per ounce
10-year Treasury (^TNX): -0.7 bps to yield 3.035%
NEW YORK, NEW YORK – JUNE 03: Traders work on the floor of the New York Stock Exchange (NYSE) at the start of the trading day on June 03, 2022 in New York City. A new jobs report released by the Labor Department this morning shows employers added 390,000 jobs in May. Stocks pointed lower ahead of the opening bell on Friday, putting indexes back into the red for the week. (Photo by Spencer Platt/Getty Images)
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.