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Futures steady ahead of November inflation data

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U.S. stock index futures inched higher on Friday as investors awaited fresh inflation data to assess the Federal Reserve’s path of future interest rate hikes, with the central bank’s policy tightening weighing heavily on equities this year.

The core personal consumption expenditure price index, the Fed’s preferred inflation gauge, is expected to have increased 0.2% in November after a similar rise in October. The data is due at 8:30 a.m. ET.

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Wall Street’s main indexes fell sharply on Thursday after data showed a resilient American economy that may push the central bank to keep hiking rates for longer.

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The fall was led by tech stocks, including semiconductors, after Micron Technology Inc forecast a much steeper-than-expected second-quarter loss, pushing Nasdaq 2.2% lower.

Investors have been jittery since last week as Fed remains stubbornly committed to achieving the 2% inflation goal and projected it would continue raising rates to above 5% in 2023, a level not seen since 2007.

The benchmark S&P 500, with a near 20% fall this year, is on track for its biggest yearly decline since the 2008 financial crisis. The tech-heavy Nasdaq has shed about 33% this year and the Dow 9%.

“There is a sense of caution across U.S. markets after yesterday’s declines. Markets are in wait-and-see mode ahead of key inflation figures, which will provide some clues about the Fed’s next move,” said Victoria Scholar, head of investment at Interactive Investor.

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“It looks like a disappointing December will cap off a disappointing year for equities, unless we get a last-minute post-Christmas Santa surge which seems unlikely at this stage.”

Other data sets that investors will closely monitor on Friday include new home sales and University of Michigan’s consumer sentiment for assessing the state of the U.S. economy.

At 5:41 a.m. ET, Dow e-minis were up 122 points, or 0.37%, S&P 500 e-minis were up 11.75 points, or 0.31%, and Nasdaq 100 e-minis were up 31.5 points, or 0.28%.

Tesla Inc rose 1.8% in premarket trading after Chief Executive Elon Musk said he will not sell any more shares of the electric-vehicle maker for another two years.

Trading volumes are likely to remain light around the Christmas holidays. (Reporting by Shubham Batra and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta)

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