US stock futures edge higher as attention turns to upcoming Fed meeting

Investing.com-- U.S. stock index futures edged higher Friday, looking to end the week on a positive note despite hotter-than-expected inflation readings putting markets on edge before a Federal Reserve meeting next week.

At 07:00 ET (11:00 GMT), S&P 500 Futures rose 12 points, 0.2%, Nasdaq 100 Futures climbed 45 points, or 0.3% and Dow Jones Futures gained 55 points, or 0.1%.

Wall Street indexes closed lower on Thursday, as hotter-than-expected producer price index inflation data ramped up concerns over inflation remaining elevated.

The reading came just days after a strong consumer price index print, with the two data points ramping up concerns that the Fed will need to keep rates higher for longer to bring down inflation.

The inflation readings preceded next week's Fed meeting, and saw markets turn more cautious over any potentially hawkish signals from the central bank.

Despite this weakness, the Dow Jones Industrial Average and S&P 500 are still tracking to end the week up around 0.5%, while the NASDAQ Composite is on pace to add 0.3%.

Sticky PPI, CPI inflation readings put rate fears back in play

While the Fed is not expected to raise interest rates further, markets were seen cutting the potential for an interest rate cut in June, after the hot inflation data.

Traders have reined in bets of a June rate cut by the Fed to 60% from 73% last week, according to the CME FedWatch Tool.

There are more data releases to digest Friday, including numbers on consumer sentiment, import prices and industrial production.

The Fed is widely expected to keep interest rates unchanged next week, and the central bank’s dot plot at the conclusion of its policy meeting next Wednesday is now crucial for guessing just how cautious the officials will be.

Adobe sinks on weak guidance

Among major premarket movers, Adobe Systems (NASDAQ:ADBE) slid 11% after issuing weaker-than-expected second quarter revenue guidance on higher competition and weak demand for its AI offerings.

Ulta Beauty (NASDAQ:ULTA) dropped 6% after the chain of beauty stores forecast full-year profit below Wall Street estimates as elevated supply-chain costs and increased promotions hurt its margins.

Crypto stocks such as MicroStrategy Incorporated (NASDAQ:MSTR), Marathon Digital (NASDAQ:MARA) and Coinbase Global (NASDAQ:COIN) all retreated after Bitcoin fell sharply from recent record highs.

Oil set to record weekly gains

Oil prices edged lower Friday, but were on course to record gains of around 4% this week after a bullish IEA report and a bigger-than-expected draw in U.S. inventories, suggesting improving demand in the world’s largest fuel consumer.

By 07:00 ET, the U.S. crude futures traded 0.6% lower at $80.75 a barrel, while the Brent contract dropped 0.6% to $84.94 per barrel, with both contracts falling back from four-month highs.

The International Energy Agency on Thursday raised its view on 2024 oil demand for a fourth time since November, saying world oil demand will rise by 1.3 million barrels a day this year, up 110,000 barrels a day from last month.

Both contracts had soared earlier this week, to their highest levels since late-November, after an unexpected draw in U.S. oil and gasoline inventories indicated that demand in the world’s largest fuel consumer was picking up.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com