Published: July 28, 2023 at 4:24 a.m. ET
U.S. stock index futures bounced back Friday from the previous session’s late day slump ahead of the release of the June the personal consumption expenditure inflation gauge as well as the quarterly employment cost index.
What’s happening
On Thursday, the Dow Jones Industrial Average DJIA fell 237 points, or 0.67%, to 35283, the S&P 500 SPX declined 29 points, or 0.64%, to 4537, and the Nasdaq Composite COMP dropped 77 points, or 0.55%, to 14050.
What’s driving markets
Friday…
U.S. stock index futures bounced back Friday from the previous session’s late day slump ahead of the release of the June the personal consumption expenditure inflation gauge as well as the quarterly employment cost index.
What’s happening
- Dow Jones Industrial Average futures
YM00
rose 77 points, or 0.2%, to 35508.
- S&P 500 futures
ES00
gained 16 points, or 0.4%, to 4580.
- Nasdaq 100 futures
NQ00
increased 101 points, or 0.7%, to 15672.
On Thursday, the Dow Jones Industrial Average
DJIA
fell 237 points, or 0.67%, to 35283, the S&P 500
SPX
declined 29 points, or 0.64%, to 4537, and the Nasdaq Composite
COMP
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.
Meanwhile, the corporate earnings reporting season rolls on with companies including Exxon Mobil
XOM
and Procter & Gamble
PG
set to release results.
Markets also were paying attention to the overnight Bank of Japan decision, where the central bank allowed bond yields
TMBMKJP-10Y
to exceed the previous boundary of 0.5% and go as high as 1%, as a report in the Nikkei that jarred markets on Thursday suggested, given inflation in the country has accelerated. The move further increased speculation of eventual policy normalization.
See: Ueda says flexible yield curve control doesn’t change Bank of Japan’s easy stance
See also: Bank of Japan decision: Here’s what analysts are saying after yield curve control move
