U.S. stock futures are trading flat as Wall Street awaits the crucial April personal consumption expenditure (PCE) price index, the Federal Reserve’s preferred inflation gauge. Investors are also reacting to a surge in oil prices, which climbed over $90 a barrel amid reports of U.S. strikes in Iran.
In corporate news, Snowflake shares jumped significantly after announcing a major investment in Amazon Web Services and reporting strong quarterly results. The market is closely watching inflation data for clues on the Fed’s future monetary policy decisions.
U.S. stock futures showed little movement in early trading Thursday, as Wall Street braced for the release of a key inflation reading that could influence the Federal Reserve's next policy move.
S&P 500 futures were down 0.35%, while Nasdaq 100 futures fell approximately 0.76%. Futures tied to the Dow Jones Industrial Average indicated a decline of 104 points.
Overnight, West Texas Intermediate crude oil futures surged 2%, surpassing $90 a barrel. This jump followed reports citing a U.S. official indicating that the U.S. military had conducted new strikes in Iran targeting a military site.
In corporate news, shares of Snowflake soared 36% in extended trading Wednesday after the cloud-based data platform announced a $6 billion commitment to Amazon Web Services over five years and reported a first-quarter earnings and revenue beat.
The market's performance on Wednesday saw the Dow Jones Industrial Average reach new intraday and closing records, gaining 182.60 points, or 0.36%. The S&P 500 also posted a record close, albeit with a smaller gain of 0.02%, while the Nasdaq Composite inched up 0.07%.
Earlier on Wednesday, oil prices had fallen amid optimism surrounding diplomatic efforts. Secretary of State Marco Rubio stated that talks with Iran had made progress, preferring a negotiated diplomatic route. However, President Trump reiterated his stance against allowing Iran to control the Strait of Hormuz.
Awaiting Key Inflation Data
All eyes are now on the release of April's personal consumption expenditure (PCE) price index, scheduled for 8:30 a.m. ET on Thursday. This inflation gauge is particularly watched under the new leadership of Fed Chair Kevin Warsh.
Economists surveyed by Dow Jones anticipate a 0.5% month-over-month increase and a 3.8% year-over-year rise in the PCE index. Core PCE, excluding food and energy, is expected to show a 0.3% monthly gain and a 3.3% annual increase.
Sector Rotation on the Horizon?
While the technology sector has driven much of the stock market's gains this year, some market observers suggest a shift may be underway. Adam Crisafulli, founder and president of Vital Knowledge, believes investors should consider broadening their portfolios.
"I definitely think that tech, at this point, is very, very stretched on the upside," Crisafulli said on CNBC's "Closing Bell: Overtime." "So I think rotation is going to be kind of the game plan for the rest of the summer."
Upcoming Earnings and Economic Data
Several companies are set to report earnings before the market opens on Thursday, including Royal Bank of Canada, Dollar Tree, Hormel Foods, Burlington Stores, and Kohl's.
Investors will also be monitoring other economic data releases, such as weekly jobless claims, April's new home sales, personal income, and preliminary durable goods orders.
In Other Market News:
- Nio Shares Jump: Chinese electric vehicle maker Nio saw its shares surge in Hong Kong and the U.S. after officially launching its new ES9 SUV.
- LG Energy Solution Secures Deal: LG Energy Solution's shares climbed significantly after its U.S. unit landed a major deal to supply battery cells for DTE Energy's storage projects in Michigan, valued at $1.6 billion.
- Asia Markets Open Lower: Regional markets in the Asia-Pacific region traded down as investors digested mixed signals from Iran-U.S. negotiations and ongoing geopolitical tensions.
- Fed Officials Emphasize Inflation Fight: Minneapolis Fed President Neel Kashkari reiterated that bringing down inflation remains his top priority, echoing concerns from other Fed officials about elevated price pressures.
- FedEx Freight Joins S&P 500: The spin-off FedEx Freight is set to replace EPAM Systems in the S&P 500 index on June 2.
