Stock market news live updates: Stock futures edge higher ahead of PCE inflation data

U.S. stock futures trudged forward Friday morning after a vicious session of selling as investors awaited a bout of economic reports and looked ahead to the long holiday weekend.

Futures tied to the S&P 500 (^GSPC) edged up 0.1%, while futures on the Dow Jones Industrial Average (^DJI) added 65 points, or roughy 0.2%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) were also a modest 0.1% higher.

The U.S. stock and bond markets will be closed on Monday, Dec. 26, in observance of Christmas Day. Bond markets will close one hour earlier than usual on Friday, at 2 p.m. ET.

The PCE price index — the Fed’s preferred measure of inflation — is set for release at 8:30 a.m. ET. Investors will also get readings on personal spending, the latest University of Michigan Consumer Sentiment Survey, and data on new home sales.

On a monthly basis, PCE is expected to show a 0.1% rise in November, down slightly from 0.3% the prior month, Bloomberg consensus estimates show. PCE inflation likely eased to a rate of 5.5% from 6% previously over the year.

Core PCE, stripping the volatile food and energy components out, is set to show a 0.2% climb over the prior month — unchanged from October — and a slightly slower rise of 4.7% over the year, down from 5% the prior month.

After the Fed’s final policy decision of 2022 last week, strategists pointed out that the most surprising datapoint among economic projections from officials was an upward revision to their core PCE expectations to 3.5% from 3.1% previously at the end of 2023. This suggested to many that the Federal Reserve will need to keep rates at a high terminal rate through 2023.

“We’re expecting the Fed to revise down its forecasts as soon as March, though progress initially will be slow; policymakers appear to have been scarred by the experience of the past year-and-a-half, and will want to be sure they aren’t moving their numbers down prematurely,” Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a note. “Markets won’t wait.”

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Friday’s moves come after a brutal previous trading day that saw the S&P, Dow, and Nasdaq register losses of 1.4%, 1%, and 2.2%, respectively. Investors were spooked by a warning from chipmaker Micron Technology about the semiconductor industry and robust labor market and consumer spending data that confirmed the outlook for “higher for longer” interest rates.

Oil prices ascended Friday and paced toward a big weekly gain as investors expected a drop in supply of Russian crude. That helped quell concerns over a drop in demand for transportation fuel in the U.S. ahead of a winter storm moving toward North America. West Texas Intermediate (WTI) crude futures – the U.S. benchmark – rose 2% to $79 per barrel.

U.S. Treasury yields inched higher, while the U.S. dollar index retreated against a basket of other currencies.

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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