Market Snapshot: U.S. stock futures bounce back with two key inflation gauges on tap

U.S. stock futures bounced back Friday ahead of the release of two indicators that Federal Reserve officials will use to judge inflation pressures.

What’s happening

Dow Jones Industrial Average futures
YM00,
+0.21%
rose 77 points, or 0.2%, to 35508.

S&P 500 futures
ES00,
+0.40%
gained 16 points, or 0.4%, to 4580.

Nasdaq 100 futures
NQ00,
+0.71%
increased 101 points, or 0.7%, to 15672.

On Thursday, the Dow Jones Industrial Average
DJIA,
-0.67%
fell 237 points, or 0.67%, to 35283, the S&P 500
SPX,
-0.64%
declined 29 points, or 0.64%, to 4537, and the Nasdaq Composite
COMP,
-0.55%
dropped 77 points, or 0.55%, to 14050.

What’s driving markets

Friday will see two major releases on inflation: the PCE price index, which is the Fed’s preferred measure of inflation, as well as the quarterly employment cost index, a crucial measure of wages. Both are due at 8:30 a.m. Eastern.

Expectations are that the core PCE price index will rise 0.2% on a monthly basis, and that the employment cost index will climb 1.1%.

“A soft ECI number can wipe out the final 8bp that is priced for the U.S. tightening cycle this year and will probably knock the dollar 0.5-1.0% lower. This would be a good story for risk assets, where both the Fed and seemingly the ECB would be closer to ending tightening cycles,” said Chris Turner, global head of markets at ING.

Earnings season rolls on with companies including Exxon Mobil
XOM,
+0.31%
and Procter & Gamble
PG,
-1.19%
set to release results.

Markets also were paying attention to the latest Bank of Japan decision, where the central bank did as a report in the Nikkei that jarred markets on Thursday, and allowed bond yields
TMBMKJP-10Y,
0.550%
to exceed the previous boundary of 0.5% and go as high as 1%. Coming as inflation in the country has accelerated, the move further increased speculation of eventual policy normalization.

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